Dubai: Plan to sell your car?
Right now, you are likely to get far more than thought possible as UAE’s secondhand automobile market powers up to meet the consistently high demand. And at selling prices that are seemingly higher than the depreciation rates on used cars.
If in 2022 demand for preowned vehicles was running high for luxury or pricey SUV models, this year, it has extended to mid- and lower priced categories. “Secondhand dealers are not willing to budge on prices even if the model we wanted had done 100,000 kilometers in 3 years,” said a fleet operator after his experience checking at various showrooms in Dubai’s Al Quoz last week.
“All we wanted were Nissan Sunny models, but sellers were not willing to consider even a token discount from the Dh40,000 tag.” (A brand new model would retail around Dh60,000.)
It’s much the same with most popular models, and secondhand car traders can afford to do so because demand is showing no signs of slowing down. Their only problem is that they are not getting enough cars to sell for all the demand that exists in the UAE auto market.
In many cases, asking prices are above the typical depreciation values associated with the model year. “Sellers are demanding prices that’s probably 20-30 per cent off on a 3-year make, when the price drop should actually be closer to 40-50 per cent,” said an industry source. “For models only a year or so old, asking prices are holding up even better.”
Which gives new meaning to the ‘as good as new’ hard sell that second dealers employ. Only this time, what they are saying is true enough when it comes to prices.
Some industry sources say that in the year-to-date, pre-owned car sales are running neck-to-neck with new ones when it comes to demand from buyers in the UAE. That’s quite a departure from the past, with the trend being that new car sales have always trumped those of secondhand.
“This is why anyone wanting to sell their car right now is sitting pretty – they will get instant buy requests,” said a senior official at a Dubai-based dealer. “And in most cases, these would match what the seller is looking out for in a best-case scenario.
“Since early 2022, prices of secondhand cars in the UAE have held up quite well.”
Will this continue?
That would depend on whether carmakers will finally be able to resolve their production issues stemming from not having enough chip supplies needed for their models. Industry sources had talked about resolving this issue by late Q1-2023, but so far there is no indication that they have done so. The target now is to resolve this and get enough shipments through by the start of the third quarter.
Whether that happens or not, secondhand dealers in the UAE are sitting pretty. They point to the new wave of residents who are calling the UAE their home. “Not all of them are opting for brand new cars as their first purchase,” said a dealer. “Based on what we see at our showrooms, these new residents are open to buying pre-owned, provided we can convince them that the models are in good condition.”
Clearly, the selling price is not an issue…