Revenue of Used Car Market in UAE

Used cars are actually of great value in today’s time. They are really good and last for a long time. Using the same car model by paying a lower purchasing price is the major reason for the increment in used car sales. But besides using the same model at lower prices, there are many other reasons that have increased the revenue of the used car market in UAE.  

Advantages of Buying a Used Car

Below we have mentioned some major advantages of purchasing a used car:

• Used cars cost less
• It comes with less depreciation that means a better investment
• Used cars have lower insurance rates
• Used cars have fewer hidden fees
• You have many options in the same budget slot
• Used cars include total confidential pricing

Used Car Market in UAE, Duabi

Used cars rental market has increased at an adverse CAGR of 0.6% from 2015-2020. And this mainly happened with the influence of taxation that the government has introduced with the less number of rented cars during the lockdown period in the country.

Therefore, a good recovery in tourism is expected due to the increased technological upgradation for both customers and suppliers with the help of favourable government initiatives by means of Expo 2020 or Abu Dhabi Grand Prix. 

Above given positive changes in consumer preferences are the plus factors, due to which the growth of the UAE car rental market is estimated in the near future. 

Key Factors of The Used Cars in UAE

New cars and used cars re-export by country

• • • • Iraq
      • China
      • Oman
      • UAE Free Zone
      • Saudi Arabia

Type of Cars

• • • • Hatchback
      • Pickup Truck
      • Sports Car
      • SUV/Crossover
      • Sedan
      • Coupe
      • Convertible
      • Other (Utility Van, Truck, Wagon etc)

Type of manufacturers based on their regions

• • • • Korean
      • Japanese
      • German
      • American
      • British

By sales channel

• • • • Online marketplace players concluding classified channel
      • B2C and B2B dealers
      • C2C – (word of mouth)

By region

• • • • Umm Al Quwain
      • Ras Al Khaimah
      • Dubai
      • Sharjah
      • Abu Dhabi
      • Fujairah
      • Ajman

Key target audience :

• • • • Used car dealerships
      • Auction players
      • Classified used car retailing online websites
      • Online market portals dealing in used car
      • Used car finance companies
      • Government bodies
      • Venture capital firms and investors
      • Associations of used cars
      • Used car sellers
      • Used car buyers

Used car companies in UAE :

• • • • Al-Nabooda Automobiles
      • Al-Ghandi Auto GroupOnline
      • Arabian Automobiles
      • Al-Tayer Motors LLC

Classified Companies

• • • • Dubizzle
      • Carmudi
      • Yalla Motor
      • Dubicars

Marketplace Players

• • • • Alba Trading FZC
      • Cars24
      • Al-Futtaim Automall
      • Gargash Motors and General Trading LLC
      • The Elite Cars
      • Autotrust
      • SellAnyCar
      • Swaidan Motors
      • Galadari Pre Owned
      • Car Switch

Future Potential Market of Used Cars in UAE

Electric Vehicles are slowly covering the market with less than 0.5% of vehicles extended as PHEVs in the UAE. The efforts to make a market for EVs are persistent with the Saudi Crown Prince, Muhammed bin Salman’s Vision of 2030 plan. 

The 2030 plan actually aims to lessen the nation’s dependence on oil, implementing the earning sources on social reforms and diversifying the economy of the country. Saudi Arabia is still lagging in EVs infrastructure as the government has not yet installed the charging stations in the public areas. 

There are multiple gaps in the EV market just as, its high prices, hybrid cars range, insufficient battery life, and ofcourse the undeveloped charging stations facility. The fleet operators are required to look after managing the vehicle charging facilities and its infrastructure. 

Expected Revenue of Used Car Market in UAE

As per the report named “UAE Used Car and Auto Classified Market Outlook to 2025” by Ken Research, it was suggested that the used car market in the United Arab Emirates is anticipated to increase further in the coming years.

After the pandemic situation in the whole world, UAE has increased it’s awareness on hygiene and health. Thus, presenting a change in customer preference from utilizing public transport to a private transportation system. 

Day by day the population is increasing in the UAE and also the country is attracting many outsiders as well. For this reason, with the growing population the demand for used cars has also increased. And the increasing demand for used cars is why the revenue of used cars is also increasing in the UAE. Observing the current situation it is estimated that used cars will capture a big market in near future. 

As per the experts, the market of the used cars will grow at a positive CAGR of 16.6% in terms of revenue during the forecast period of CY’20-CY’25.

Conclusion

The UAE used car market of Dubai is increasing at a high CAGR because of the increasing emergence of digitally authorized portals of used car sales.  The online portals also serve the surging and buying demand for used cars.

Earlier, the Used Car Market in UAE was worth USD 12.6 billion in the year 2020. And it is further projected to grow at the rate of USD 18.3 billion by 2027 by growing at the CAGR of 5.7%. 

Apart from the Covid reason, the competitive price is also another reason why the market of used cars is increasingly growing in the UAE. Used cars are good and value for money over new cars. The online platforms of used cars make them easily accessible to the users. Also, some established dealers are now contributing to this for the potential growth of the used cars in the market. 

As per this detailed guide, one of the major reasons influencing the growth of the second hand cars market in the UAE is the development of online used cars dealers. Over the past few years, there are many leading online dealers and distributors that have appeared and acquired substantial traction namely, Dubai Cars, Cars24, YallaMotor, and UAECarMarket. These services have opened a significant growth opportunity for the United Arab Emirates used car market.

Also, this guide tells how the global pandemic has affected all the markets and has become a major reason for the increased revenue of the used cars market in Dubai. Economic constraints due to the pandemic situation has decreased the purchasing power of consumers which has affected the demand of automobiles. 

However, there is a sharp decline in the demand for automobiles but the pandemic gave a boost to the used car market in the UAE. The above mentioned other reasons also contribute to the shift just as the desire to drive privately owned vehicles rather opting for taxi services because of safety premises. Due to the decreased demand of the automobiles, disruption of manufacturing and distribution has resulted in a surge for the demand of the used cars in the UAE market. 

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