UAE: Used car prices soar up to 20% due to shortage of new vehicles

The used car prices have soared by 20 per cent in the UAE in 2022 and this is likely to increase further due to the shortage of new cars, exponential growth in population and the need for personal mobility during the post-pandemic period.

Automobile industry executives noted that as a result of a shortage of cars, many car owners, therefore, keep their cars for a slightly extended period than what has been historically observed.

They also ruled out any major impact of high oil prices and an increase in the interest rates on the pre-owned vehicle sales in the country with 70 per cent of the cars being sold through auto loans.

“The UAE’s pre-owned car market, post-pandemic, has witnessed an exponential growth in demand, aided by Expo 2020 which has led to a huge influx of tourists and massive job creation. Furthermore, due to the impact of the pandemic, the need for personal mobility has triggered the growth in both first-time and second car buyers. The used car market has also remained buoyant as a result of the global chip shortage,” said Abhinav Gupta, CEO of Gulf Region at Cars24.

Despite an increase in prices, Gupta added the segment remains highly affordable as compared to new ones.

“The new expatriates want to be mobile as early as they can, therefore, that has also had a positive impact on the used car market,” said Gupta, whose company has rolled out around 7,000 cars since it started operations in UAE last year.

Iqbal Dawood, managing director of Abu Mousa Motors, prices of used as well as new cars prices are increasing due to exponentially high freight rates and the lingering effect of the pandemic.

“Since the outbreak of the pandemic, freight availability has become a major challenge for pre-owned car importers. For example, booking a container from Japan to Africa is almost impossible and even if we get it, the freight charges are exponentially high. And this has badly disturbed the supply chain.”

Dawood said prices of pre-owned cars in the UAE have increased around 15-20 per cent in the UAE this year and projected that this trend will continue for the remainder of the year. “We expect another 20 per cent further increase in pre-owned car prices this year,” he said.

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