A totally new car will lose more than 20% of its original value from the moment you use it on the road. In the first 5 years the depreciation could reach up to 50-60% of the car price. By the time you have used it for 10 years, you will not find anyone willing to pay more than 10% of its original rate.
Considering that in many cases you get a loan from the bank to buy a car (with an annual interest no less than 4%), imagine what could happen if you agree to pay an installment of about AED 2.500 per month for 4 years to possess a car worth AED 100.000 and after using it for 2 years you were obliged to leave the UAE.
According to this scenario you would be asked to pay the remaining AED 50-60.000 of your car installments directly to the bank in cash (plus about AED 3.000 early loan payment settlement charges), while you will not be able to sell your car for more than AED 50.000.
This would practically mean that you will end up in two years time paying about AED 120.000 besides the day-to-day expenses for your car, that is an estimated daily cost of around AED 165 , the same amount you would have paid for a leased car.
In short, buying a new car is worth only if you plan to use it for more than 5 years. Otherwise some of the cost effective options are 1) buying a used car, at least 2-3 years old, 2) renting a car.
EmiratesGreeks advice for Greeks in the UAE
Hrach Kalsahakian, 17 January 2010
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