Buying your dream car in Dubai is made doubly pleasurable if you know the basics of car finance. Here’s presenting an easy guide.
Driving in one’s car is a pleasure in Dubai. The city offers a huge selection of new and used cars, as also several car finance options. Hence, buying a car in Dubai is an easy process.
But there are certain basics to be cognisant of – did you know, for instance, how much the down payment on a car is? Or the longest tenure for a car loan in Dubai? Here’s a list of facts about car finance in Dubai that you need to be aware of before applying for a car loan:
- The documents you require are: Passport, valid driver’s licence, salary certificate, six months bank statements and insurance papers of old car.
- You need to pay a minimum 20% of the car’s value as down payment. The remaining 80% can come via auto loan from the bank.
- The interest rate calculation goes thus: 80% of the car’s price x current interest rate x tenure of payment. The bank will add this figure to the 80% loan amount ÷ no. of months of tenure.
- You cannot take an auto loan exceeding 5 years of tenure.
- You can reduce the interest payable by opting for a shorter tenure. However, you should do this only if you can pay higher EMIs.
- Defaulting on loan payments results in the vehicle being attached by the bank. The applicant must also shell out late charges and other penalties.
Renting v/s buying cars
Since most people find the costs of cars in Dubai quite prohibitive, they opt to rent cars instead. Car rentals pick up during the non-summer months in Dubai. Renting out cars is now a lucrative business idea in Dubai.
If you are interested in getting car finance in Dubai for a car rental business, study the steps above. Your bank will also guide you on the best loan options for the venture. Understand the business model for the enterprise, and such terms as fixed cost motoring, service and maintenance clauses, setting up 24/7 call centre assistance and road service systems.