UAE car rentals surge as drivers rethink car ownership, adopt ‘wait-and-watch’ approach

Dubai: A growing number of UAE residents are turning to monthly and flexible car rentals instead of committing to buying or financing a vehicle.

Leasing companies Gulf News spoke with are reporting stronger demand as customers look for greater flexibility amid changing financial and personal circumstances caused by the regional conflict.

SelfDrive Mobility said demand for monthly and long-term leasing is now 30–35 per cent higher than last year, while Udrive is reporting a 14 per cent year-on-year increase in registrations.

Dollar Car Rental also said it is seeing growing demand for monthly rentals, including from residents who may previously have considered buying or financing a car.

However, the shift does not mean UAE consumers are abandoning ownership altogether. Instead, rental companies describe a market in which residents are increasingly weighing the cost and commitment of ownership against the ability to access a vehicle for only as long as they need it.

Soham Shah, CEO and founder of SelfDrive Mobility, said the company is seeing a "clear movement" away from ownership towards on-demand access through monthly rental or long-term leasing.

"That demand is running approximately 30–35 percent higher than last year," he said.

Importantly, Shah said many of these customers would ordinarily have bought a vehicle. One factor changing that decision is vehicle availability, with model supply constrained by shipping and imports.

"Many of these are customers who, under normal circumstances, would have purchased a vehicle," Shah said. "What is changing the calculation is supply: model availability in the market is constrained, with shipping and imports limited, so residents are increasingly choosing monthly and long-term leasing as the more practical route."

Udrive founder and CEO Hasib Khan also pointed to a broader shift towards flexibility but cautioned against attributing the trend entirely to geopolitical uncertainty.

"The cost of ownership, financing, insurance, depreciation and the commitment involved in buying a car are all factors," he said.

The change is also showing up in how long customers keep rental vehicles.

At SelfDrive Mobility, the average rental duration is now close to six months, according to Shah, who described this as the "sweet spot" in the current market. The company is also seeing an increase in annual rentals.

Udrive said customers are increasingly comfortable using rental cars for different periods rather than viewing rental purely as a holiday product.

"The interesting development is the overlap between the two," Khan said. "A customer may use Udrive by the minute during one period and then take a car for a month when their circumstances change."

For Dollar Car Rental, longer-term contracts are also an established part of the market. The company said rental operators allocate around 40–60 per cent of their fleets to 12-month contracts and multi-year leases, helping provide more predictable fleet utilisation, particularly during softer periods such as summer.

The increase in discounts and monthly rental advertisements across the UAE does not necessarily mean companies are struggling for customers.

Instead, operators point to a combination of fleet availability, competition and seasonality.

SelfDrive Mobility said tourism has affected daily and weekly utilisation, leaving a larger volume of retail rental vehicles available. Corporate customers have also become more cautious, bringing leasing utilisation down slightly.

"The result again is fleet availability, and that is what is driving the discounts now visible across short-term rentals, monthly plans, and leasing options," Shah said.

Udrive similarly said the market has become "extremely competitive" and that a significant amount of fleet has been added, while summer traditionally brings softer demand.

"That combination naturally creates more aggressive pricing and promotional offers as operators compete for utilisation," Khan said.

Dollar Car Rental said demand for discounted and monthly offers also tends to change according to the time of year, with the back-to-school period creating demand from families needing an additional vehicle for school runs and professionals requiring cars for commuting.

The regional conflict is part of the backdrop, but the companies are cautious about presenting it as the sole reason for the change.

SelfDrive Mobility said it has seen fewer customers committing to ownership and long-term finance arrangements during a period of uncertainty.

"When any market moves through a period of uncertainty, it is a natural course of action for customers to look at options that offer more flexibility," Shah said.

But he stressed that the market is not moving entirely in one direction. Some established residents are still moving into ownership, particularly as new models enter the market.

"There are two cycles running at once: one segment choosing leasing and flexible plans because they want to stay lean, and another moving towards ownership," Shah said.

"The broader trend, though, is towards flexibility rather than committing to ownership or long-term financing."

Udrive's Khan made a similar distinction. "We have seen continued demand for flexible rental products, but I would be careful about saying that the regional situation alone is responsible," he said.

"What is clear is that when there is uncertainty, flexibility becomes more valuable."

Dollar Car Rental said regional uncertainty has contributed to caution among some customers considering large financial commitments, although the extent varies between customer groups.

The strongest growth is coming from residents rather than tourists, according to the companies.

SelfDrive Mobility said established and newly arrived residents are generating most of its current growth, while tourist and corporate demand is more limited.

Udrive said around 90 per cent of its usage comes from residents rather than tourists, with particularly strong demand from people who have recently moved to the UAE and existing residents reconsidering whether ownership is necessary.

Dollar Car Rental is also seeing its strongest growth among UAE residents and new residents, while corporate customers continue to provide demand for employee vehicles, business travel and temporary assignments.

For newly arrived residents, renting can provide a bridge between moving to the UAE and deciding what vehicle to purchase — or whether to purchase one at all.

The move towards flexible access is particularly visible among younger residents.

SelfDrive Mobility said younger customers are "consistently choosing month-to-month subscriptions over ownership" and are reluctant to take on car loans.

"This generation wants to stay lean," Shah said. "They prefer to have a car only when they need one, typically subscribing for two to three months, and they will upgrade to a different model or return the vehicle entirely when circumstances change."

Udrive's Khan said younger consumers are already accustomed to paying for access rather than ownership through subscriptions for entertainment, software and other services.

"Mobility is naturally moving in the same direction," he said.

Dollar Car Rental is also seeing strong interest among young professionals, entrepreneurs and newer residents who may not want a large upfront payment or a long financing commitment.

Despite the growth in rentals, the UAE remains an ownership market.

Dollar Car Rental said 90 per cent of its customers are still choosing to purchase a vehicle, although it said the share considering rental or leasing as an alternative has been increasing month on month.

That distinction is important: the rental market's growth is not necessarily replacing car ownership across the UAE. Instead, it points to a more flexible approach to mobility, particularly among residents who are new to the country, waiting for a vehicle, need a second car temporarily or are unwilling to take on a long-term financial commitment.

For consumers, the attraction is straightforward: a monthly rental can provide access to a vehicle without the upfront cost of buying, while also avoiding some of the longer-term concerns around depreciation and resale.

But whether renting is cheaper than owning ultimately depends on how long the vehicle is needed, the rental rate, insurance and other costs, and the price of the vehicle being considered.