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UAE: Why some motorists lease cars instead of buying them

It is often easier for residents to secure a car lease than an auto loan from the bank

Published: Thu 9 Jan 2025, 6:00 AM

Updated: Thu 9 Jan 2025, 6:18 PM

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As more individuals seek financial flexibility and convenience, leasing cars has gained traction as an appealing choice. According to industry experts, there has been a noticeable increase in car leasing options among residents in the UAE.

This is especially the case because it is often easier for residents to secure a car lease than an auto loan from the bank.

Boby John, a sales executive at Galadari Rent A Car, noted, “We have seen an increase in leasing in the past years. With leasing options available for up to four years, we cater to all kinds of clients, with leasing periods ranging from six months to three and four years.”

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He emphasised that various factors drive this trend, including the convenience of leasing, which alleviates concerns about maintenance and ownership, as well as the financial burden it lifts for those who may struggle to secure a loan.

Ifthikar Aly, Founder/CEO of Kandy Cars Trading, noted a significant surge in car leasing options, stating, “Nowadays, many people find it challenging to obtain a loan for buying a car due to banks raising the minimum salary requirements and the overall decrease in salaries.” He emphasised that for many individuals, leasing has become the most viable solution. “For a lot of people, this is simply the best option available,” he added.

When you lease a car, you agree to pay a monthly fee to use the vehicle for the duration of the lease. At the end of the lease, you have the option to return the car to the dealership or buy it outright.

For some the option of leasing rather than buying was because of instability. Mariah Albert, a British expat, said “We decided to lease in our first year because we weren’t sure whether we’d stay in the UAE long-term,” she recalled. Initially uncertain about her future in the region, she appreciated the flexibility leasing offered.

Three years later, Mariah reflected on her choice, stating that it allowed her to focus on her career and personal life without the stress of vehicle ownership. “I can confidently say it’s been a relief to hand back the keys whenever because we are between the UK and UAE. Plus, I love getting a new car every year without the hassle of maintenance costs,” she added.

Adding to this perspective, Omer Amin, a Sudanese expat who frequently visits the UAE for business, noted that his leasing experience has been very positive. “Leasing has been the most convenient option for me. The smaller down payment compared to buying makes it easier to manage my finances,” he explained.

His frequent trips mean he often needs access to a vehicle without the commitment of ownership. “Plus, I don’t have to stress about the car’s depreciation. At the end of the lease, I can just return the car without worrying about its resale value.” This financial strategy aligns well with his lifestyle, allowing him to focus on work while driving a new vehicle.

However, not everyone is convinced that leasing is the best option after experiencing it. Fatima S, an Indian expat, expressed her reservations about leasing: “I leased a car for a year, but I found myself worrying about the mileage limits. I enjoy road trips, and it felt restrictive,” she said. The limits imposed by leasing contracts can be a significant drawback for those who love to travel.

For Fatima, leasing seemed like the best option at the time, as she wasn’t stable in her job and uncertain about her long-term plans. A year later, she decided to buy her own car, stating, “For me, buying a car is more practical in the long run.”

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