Dubai: Anyone who dilly-dallied through Q4-17 to decide on their next car will need a few lessons on financial planning. More so if they were aiming for a pricey version of the latest SUV or luxury sedan. Because with VAT, they will be adding a few zeros to what they will cost to get them out of their showrooms. It will also mean that these prospective buyers did not look closely enough at the many opportunities UAE’s dealerships had to offer in recent weeks to buy a vehicle without having to factor in VAT.
It will be when buying a car that UAE’s consumers will realise how much costlier things have become in a post-VAT world. With residential property being rated at 0 per cent, a car would be one of the costliest purchases they will end up making. (Unless they are the sort who invests in commercial real estate or pick up diamond jewellery worth north of Dh100,000 on a regular basis.) So, how can car buyers keep their VAT costs down? They could think of leasing as an option, and taking out contracts for three years before deciding to buy or go in for an upgrade. Dealerships will be willing to accommodate them in any manner possible.
The other option would be for them to think “pre-owned”, where they would have to pay 5 per cent only on the price difference between that vehicle was bought and sold for. Next year could well be the time for the UAE’s certified pre-owned market to come into its own.