UAE declares decrease in used car prices

Due to a surge in new car arrivals and the entry of new competitors, notably from China, pre-owned car prices in the United Arab Emirates (UAE) plummeted by more than 15 percent last year.

Industry insiders predict further price drops this year, although stabilization is expected later due to growing demand from a continually expanding population.

The upcoming Ramadan season, often marked by substantial discounts from dealers, could significantly boost sales.

The decline in car prices is attributed to a 14.8% drop in prices the previous year, driven by increased inventories of new cars following disruptions caused by COVID-19.

By the end of 2023, used cars were selling nearly twice as fast as at the beginning of the year, with the average selling time in December being 19 days, indicating a notable market acceleration.

Abhinav Gupta, CEO of Cars24 for the Gulf Region, noted stable conditions in the used car market in 2023 but anticipates a surge in demand during Ramadan, forecasting a 10 percent sales increase compared to the previous year.

Cars24 experienced a 15 percent rise in inquiries and a 10 percent spike in units sold, having sold over 15,000 cars since entering the UAE in 2021.

The UAE, being a significant market for automobile export and re-export, boasts one of the most extensive used car markets.

Chinese automakers’ successful introduction of new models domestically has further fueled market competition.

Looking ahead to 2024, Glenn Harwood, co-founder of AlgoDriven, predicts an additional 15 percent drop in used car prices due to growing options and subsequent discounts.

However, he expects market buoyancy due to the UAE’s robust macro environment, expanding expat community, and heightened competition among used car dealers.

Cars24 observes a surge in premium automobile inquiries, with Gupta foreseeing initial spikes followed by rate plateaus.

Notably, clients show a preference for four to six-year-old cars with mileage ranging from ninety thousand to twelve thousand kilometers.

Gupta highlights the dominance of millennials in car ownership, with GenZ expected to follow suit.

With a plethora of pre-owned car options available, customers now prioritize test-driving various models before making a final decision.

Additionally, SUVs continue to trend globally and in the UAE, owing to their perceived reliability and safety features.

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