Used car prices have gone up by 20% due to shortage of new vehicles
The used vehicle prices have taken off by 20% in the UAE in 2022 and this is probably going to increment further because of the shortage of new vehicles, dramatic growth in the populace, and the requirement for personal transportation during the post-pandemic era.
Automobile industry leaders pointed out that because of a shortage of vehicles, numerous vehicle owners, hence, hold on to their vehicles for a somewhat extended period than what has been historically noticed.
They also precluded any significant effect of high oil costs and an expansion in the interest rate on the used car sales in the country with 70% of the vehicles being sold through car loans.
“The UAE’s pre-owned car market, post-pandemic, has witnessed an exponential growth in demand, aided by Expo 2020 which has led to a huge influx of tourists and massive job creation. Furthermore, due to the impact of the pandemic, the need for personal mobility has triggered the growth in both first-time and second car buyers. The used car market has also remained buoyant as a result of the global chip shortage,” said Abhinav Gupta, CEO of Gulf Region at Cars24.
Despite an increase in prices, Gupta added the portion remains exceptionally reasonable when compared with new ones.
“The new expatriates want to be mobile as early as they can, therefore, that has also had a positive impact on the used car market,” said Gupta, whose organization has rolled out around 7,000 cars since it began operations in UAE last year.
Iqbal Dawood, managing director of Abu Mousa Motors, prices of used as well as new vehicles costs are expanding because of dramatically high cargo rates and the waiting lingering of the pandemic.
“Since the outbreak of the pandemic, freight availability has become a major challenge for pre-owned car importers. For example, booking a container from Japan to Africa is almost impossible and even if we get it, the freight charges are exponentially high. And this has badly disturbed the supply chain.”
Dawood expressed prices of used vehicles in the UAE have expanded around 15-20 percent in the UAE this year and projected that this pattern will go on until the end of the year. “We expect another 20 per cent further increase in pre-owned car prices this year,” he said.