Pre-owned car prices in the UAE fell at nearly 15 per cent last year as deliveries of new cars improved along with inflow of new players into the market, especially from China.
Industry players say that prices could drop further this year but stabilise later as demand is projected to pick up further with further population growth. Also, there could be a spike in sales during Ramadan 2024 when auto dealers launch massive discounts and campaigns.
According to automotive digital platform AlgoDriven, prices dropped 14.8 per cent last year as new car inventories increased post-Covid-19 impact on the automotive industry’s production levels.
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The market picked up in the second half as used cars were selling almost twice as fast at the end of 2023 as they were at the start of the year, taking 19 days on average for used cars to sell in December.
Abhinav Gupta, CEO of Gulf Region at Cars24, said the used car market was quite static in 2023.
But he expected that Ramadan is a peak time for car sales in the region and they’re estimating a 10 per cent growth overall from last year.
Gupta revealed that Cars24 bucked the trend, recording a 15 per cent increase in inquiries and 10 per cent growth in units sold. Since its foray to the UAE in 2021, Cars24 has sold over 15,000 units.
The UAE is one of the largest used car markets in the region, thanks to Dubai’s position as a major export and re-export market for vehicles to Asia and Africa. Of late, Chinese carmakers have also been increasing their market share, introducing new models in the local market.
2024 outlook
Glenn Harwood, co-founder of AlgoDriven, said with new car options increasing and bringing discounts to the consumer, it is likely the UAE market would see another 15 per cent reduction in used car prices over 2024. “However, the strong macro environment in the UAE, a growing expat population and increased competition among used car retailers should mean the market stays buoyant,” he said.
AlgoDriven predicted that prices will not fall further to pre-Covid levels, as the UAE’s automotive industry looks set to benefit from surging immigration and the country’s image as a thriving digital business and financial hub.
However, the Cars24 regional chief sees an increase, especially around luxury models. “We are anticipating a spike for the first few months of the year due to demand followed by an eventual plateau in the rates,” said Gupta.
Most common inquiries
According to Cars24, many buyers prefer to buy cars that are 4-6 years old and have been driven between 90,000 to 120,000km. Warranty, accident history and mileage are the most common inquiries that buyers ask when inquiring about pre-owned cars.
Highlighting new trends, Gupta revealed that 70 per cent of over 3 million cars currently on roads in the UAE are owned by millennials while GenZ is soon going to surpass this figure.
With so many choices at hand for pre-owned vehicles, he said customers are now looking to test-drive multiple cars before they finalise a model.
“SUVs are also going to be an ongoing trend this year. In 2023, 55 per cent of our customers preferred to buy SUVs due to their safety and reliability. Not just in the UAE, but the preference for SUV models seems to be the case globally,” he added.