Includes insurance covering involuntary job loss, 3-year maintenance contracts, and an extension of the “warranty”
Car agencies offer purchasing facilities... and the option of “rental to own”
It is expected that the demand for used cars will increase in the coming years.
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Car agencies have revealed that they currently offer several facilities and greater flexibility for the purchase of vehicles, the most important of which are payment facilities ranging between 40 and 50% of the car value during the financing period, with the remaining balance paid at the end of the loan period, and the “rent-to-own” option, as well as insurance. To cover involuntary loss of employment or bankruptcy, provide comprehensive insurance, maintenance contracts for three years for free, extend warranty up to five years, register the vehicle, and provide customized programs for used vehicles.
Officials in those agencies confirmed to "Emirates Today" that there is banking competition to reduce the interest rate on car financing, pointing out that the car markets are witnessing a remarkable recovery, a development in sales, and an unprecedented increase in demand for high-quality used cars.
more flexibility
In detail, the General Manager of the Emirates Motor Company, Mohammed Ghazi Al-Momani, said that car agencies are currently providing facilities that provide greater flexibility for buyers in terms of paying car loans.
Al-Momani added to “Emirates Today”: “Previously, the period of the bank financing loan was 60 months, a maximum, and the amount of financing amounts to 80% of the value of the car, to be paid on a monthly basis, but car agencies recently offered a more flexible option, which includes the payment of what Between 40 and 50% of the car value during the financing period, with the remaining balance paid at the end of the loan term, through a larger mandatory payment deferred until the end of the agreement.”
He pointed out that the great benefit of this system is that the final payment allows the buyer to make lower monthly payments during the term of the agreement.
Al-Momani referred to another flexible option, which is currently popular, which is “lease-to-own”, where the customer rents a car for a specified period, and the remaining value is calculated and paid at the end of the period, unlike buying a car with a loan, where the name of the mortgagee remains as the “owner” until End of the mortgage term.
job loss
Al-Momani stated that buyers can obtain insurance to cover involuntary loss of employment, or “bankruptcy,” noting that this policy usually pays up to six months of monthly installments to repay the loan, if the employer exempts the dealer from his work, stressing that this coverage gives dealers Confidence to move forward with their car purchase in turbulent times.
interest rates
Al-Momani indicated that the interest rates on car financing have become very competitive during the “Covid-19” pandemic, at a time when banks continue to offer attractive rates to customers, especially Emiratis and those with high salaries, indicating that interest rates on bank financing differ slightly according to the profile of each buyer. , in addition to the type and value of the vehicle he chooses.
He continued, "In general, (Emirates Motors Company) customers can obtain a financing rate of about 2.10%."
On the expectations of interest rates on car financing during 2022, Momani said that the matter is still somewhat unclear at the present time, especially after the emergence of the new mutant of the Corona virus "Omicron".
He believed that the full market recovery in 2022 will lead to an increase in interest rates, as a result of the high increasing demand, but that other waves of the virus may lead to more restrictions globally, and in this case the risks of high unemployment and slowing economic growth will continue to push the interest rate to decline again.
Multiple facilities
For his part, the Executive Director of Sales and Marketing at Bin Hamouda Motors, Ayman Al-Bijawi, said that there are facilities to buy cars, such as providing comprehensive insurance, and free maintenance contracts for three years, as well as extending the warranty period up to five years, with vehicle registration by agencies.
He pointed out that the rate of Murabaha on cars starts from 2%, with banking offers for most categories, in light of competition from banks to reduce the interest rate on financing vehicles.
Al-Bijawi stressed that the car market is currently witnessing a remarkable recovery, as we are witnessing a remarkable development in sales, especially in the last quarter of last year, which is the best ever during 2021.
Al-Bijawi expected the continued growth in car sales through the introduction of new models and updates to some models.
used cars
In the same context, the Senior Managing Director of Al-Futtaim Motors, Vincent Wienen, said that there is an unprecedented increase in demand for high-quality used cars, expecting the demand for used cars to grow in the coming years, which prompted the company to open Automall in Finally, Dubai Investments Park, to make it easier for dealers looking to buy and sell used cars in the UAE.
He expected the sales volume to reach about 10,000 cars this year, pointing out that this step comes as part of Al-Futtaim's strategy aimed at developing business and facilitating buyers who want a more comprehensive shopping experience for used cars.
Rivoli: high demand levels
The managing director of "Trading Enterprises Company", Oscar Rivoli, said that the high levels of demand for the purchase of cars pushed "Trading Enterprises - Honda and Mopar after-sales services" from "Chrysler", "Dodge", "Jeep" and "Ram", a subsidiary of Al-Futtaim Group, to the opening of its service center on Sheikh Zayed Road, to continue providing the best levels of service.
He explained that Volvo Cars launched the "Volvo Studio", which provides a more modern car buying experience for customers, as it provides them with an enhanced shopping opportunity, complete with performance experiences customized for them, noting that Volvo recently launched a program for used and certified cars "Volvo Select" in Dubai Festival City.
High Speed Vehicle Financing
CEO of aafaq Islamic Finance, Rashid Mahboob Al Qubaisi, said that aafaq provides financing products for cars and luxury, high-speed and modified vehicles, with many and varied benefits and facilities for the citizens and residents of the country.
He explained that these products include payment facilities and flexible payment programs, through financing by the "Murabaha" method.
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