Buying used cars in Dubai makes one able to own a dependable vehicle without being burdened by the high price tag of a new car. However, not everyone can afford to pay the full cost of the car in one go. Fortunately, there are quite a few financing options available in the UAE that make buying used cars in Dubai more accessible and affordable. Here we will present the best alternatives available to a purchaser and how you can make an informed choice for your next car buy.
1. Bank auto loans
Bank loans are the common way to finance a used car in the UAE. Most local and international banks in Dubai offer auto loans specifically tailored for used vehicles. The benefits of this loan include competitive interest rates, flexible repayment terms, and high loan amounts—often up to 80% of the car’s value.
Requirements
● Valid UAE residence visa
● Proof of income or salary certificate
● Down payment (generally 20% of the car’s value)
Compare the offers from different banks in order to avail the one with the lowest interest rate and best terms. Some of the top banks for a used car loan are Emirates NBD, ADCB, and FAB.
2. Car dealer financing plans
In-house financing plans for buyers are common among many car dealerships in Dubai. The biggest advantage of such plans is the hassle-free and smooth process of financing managed by a dealership.
The plans often come with promotional offers such as low- or even zero-interest rates for a stipulated period of time. Be cautious, however, and read the fine print; after the promotion period, those interest rates could shoot up quickly.
For example, if you’re looking for convertible cars for sale in Dubai, many dealers provide financing solutions tailored to your budget. Check with reputable dealers to explore their financing options.
3. Islamic auto financing
Islamic banks in the UAE, catering to purchases seeking Sharia-compliant financing alternatives, offer Murabaha-based or Ijarah-based car financing. Under Murabaha, the bank will purchase the car and subsequently sell it to a buyer at a fixed margin of profit. Under Ijarah, the bank will lease the car until full payment is made.
Benefits
● No interest charged as it is Sharia-compliant
● Fixed monthly payments
● Clear terms
The leading institutions for Islamic auto financing include Dubai Islamic Bank and Abu Dhabi Islamic Bank.
4. Personal loans
You can also finance a used car in Dubai using a personal loan. Personal loans differ from auto loans since they are not secured by the value of the vehicle, leaving you with more leeway. That would be ideal if you want no restriction on the type or age of the car.
However, personal loans generally have higher interest rates than auto loans. It is important to consider your repayment ability before going for this option.
5. Employer assistance programs
Some employers in Dubai offer car financing as part of their employee benefits package. The programs may include interest-free loans or subsidies for buying a car. If your employer offers such benefits, this can be a cost-effective way to finance your purchase. Please check with your HR department to find out if this is an option available to you.
6. Peer-to-peer lending platforms
Over the last couple of years, peer-to-peer lending platforms have become quite popular. These are platforms that bring borrowers and lenders together, typically at much lower interest rates than going to a bank and with flexible terms. Some of the P2P lending platforms in UAE include Beehive and Yallacompare. While this option can be useful, ensure that the platform you operate with is credible and regulated so as not to expose yourself to possible risks.
7. Credit card financing
A buyer who has a high credit limit may choose to finance a used car through a credit card. Many credit card providers in Dubai allow installment plans at low or even zero interest rates for high-cost items like cars.
Pros
● Quick approval process
● Flexible repayment periods
However, you will be charged high interest rates if the balance is not paid off during the promotional period. Go for this option only when you are sure of making all installment payments on time.
Conclusion
Pre-owned car financing in Dubai does not have to be that complex. Consider bank loans, dealer financing, and Islamic auto financing before deciding which one is most convenient for your budget and needs. Never accept any deal before comparing the offers and considering all the details provided in the contract; if done properly, your dream car will be yours in Dubai. You can also explore a marketplace like OneClickDrive as some dealers may offer financing options for buyers. Check in with each dealer to make such an inquiry.