Dubai: The demand for used cars has increased "dramatically," said Brett Chimes, Sales Manager at Reem Automobile, which sells high-end used cars such as Porsche, Mercedes Benz and BMW in Dubai.
"The gap between new and used is so big now because people are putting off buying new cars," he said. "So they've turned to used cars."
Chimes added that one of the reasons behind the increase in demand is the fact that the prices of used cars have become realistic following the global economic downturn.
He said that the prices of used cars were inflated at a time when buying a new car required a long wait. "Now you don't have to wait for a month or so for a brand new car. You can go out and buy one. The waiting time is down and so it has affected the used car prices," he said.
Savings
The other reason and the most obvious is one can save a lot of money investing in a used car rather than a new one. "Within the first year a new car would lose 20 per cent of its price," he said. "So you're saving that right away when buying a used car."
Al-Futtaim Automall, the second-hand vehicles division of Al-Futtaim Group, opened its first new outlet in Ras Al Khaimah last week. Colin Cordery, Managing Director of Al-Futtaim Automall told Gulf News that there was a clear difference in the effect of the financial crisis on the used car market in comparison to the new car market.
"The new car market dropped nearly 40 per cent but our volumes in Auto-mall held up very well in that period," he said. "In sales it was very close to the budgeted figures.
"Yes, we were affected, but significantly less impacted than the new car market," he added.
Automall currently has seven showrooms located across the UAE — four in Dubai and one in each of Abu Dhabi, Sharjah and Ajman. The company plans to be present in every emirates of the UAE. "We don't have a time line yet but our next two preferred areas would be on the other side of the UAE in Fujairah and Al Ain," he said.
Cordery said that the profitability for 2010 has so far been aligned with their budget.
"I'm very optimistic for 2010 and that our budgets will be realised. My outlook for Automall is very positive for the next two years which I think will coincide with the UAE coming from the difficulties of 2009. This year is going to resume acceptable growth levels and we're in a good place to take advantage of that," he said.
Chimes said that buyers can easily find used cars that are still under the manufacturer's warranty and at a low mileage. "There's really no reason for people to buy new cars these days."
