Analysing used car market trends in the UAE

The Honda Accord has a crazy fan following in KSA, so much so that even the police had asked my brother to sell his car after stopping him at a checkpoint.

BHPian 2TR-FE recently shared this with other enthusiasts.

After moving to the UAE from Saudi Arabia, I found myself bewildered by a few observations that I wanted to share with the automotive community in general. Although both UAE and KSA are countries within the GCC where expenditure on private cars is significantly high, I personally observed an interesting trend in the used car market.

The cars which are popular in one region lead to a better resale value there, but not necessarily in other regions. This leads to a hack: we can negotiate hard on those used cars which are not popular.

Consider two scenarios. The Honda Accord has a crazy fan following in KSA, so much so that even the police had asked my brother to sell his car after stopping him at a checkpoint. The youth are ready to pay up to SAR 30,000 for a 15-year-old car which cost about SAR 96,000 when new. Whereas in the UAE, the same Accord can be sold for even AED 15,000 , which is actually its upper limit. Poorly maintained vehicles of the same age can be flipped for as low as AED 8,000 . Needless to say, it does have a demand when compared to its German counterparts, but relatively speaking, the demand in UAE for an Accord when compared to KSA is way too less.

The below screenshot is of a popular used car's website in UAE. Sorted the listings in the order of their Descending price.

On the other hand, we have the screenshot of a popular website in Saudi. Here, the owner has quoted SAR 35,000 which I am sure no one will pay. The best price he may get would be around SAR 28,000 considering his Odo reading of 4,45,000 kms.

The same is true for the Nissan Patrol and GMC Yukon series (including the Tahoe and Suburban). In KSA, an individual with a budget of Two Hundred Thousand and above would directly go and purchase a GMC Yukon (Not considering the Toyota stable as my comparison is specific to two models). Surprisingly, you will spot a Yukon every 10 minutes in KSA. While in UAE, people are crazy to own a Patrol. A person with a budget of even One Hundred Thousand would be happy to get himself into the EMI headaches just to get the big-man feel of a Patrol. Conclusively, Patrols are way more expensive in the used market when compared to GMCs.

Considering the above, I suggest searching for reliable models that are not popular, which thereby translates to a better bang for your buck. Please chip in your opinions on the above with specific examples.

Here's what BHPian DicKy had to say on the matter:

Interesting topic and since the GCC market is being discussed let me chime in my two paisa worth of observations.

Era of development boom

When the countries actually had their development boom phase plays a role. For example Kuwait was an early developer. It had its boom in the 50s and 60s. You can see it in the old infrastructure and saturated social life. And can see the same in cars too. They have more of proper 60s and 70s muscle cars/sportscars unlike the rest of GCC nations. Qatar actually imports loads of old classics because either they didn't buy when they were new or they rusted off without proper care. KSA had its biggest boom in the late 70s and 80s. Also reflected in the car market. The car sales in 1980s KSA was so huge that the used cars market spilled out well into the late 2000s when stringent fitness tests forced lots of old cars out. My dad bought his first car, a Mazda two door for 500 riyals in the early 80s and sold it for 500 riyals after two years before even getting his driving license. It was almost the Wild West with lax regulations and minimal paper work. UAE had its boom in the 1990s and is continuing till now, so you have more of buyers who started buying during the SUV craze of the late 1990s. Qatar had its economic boom in the late 2000s, so the general age of cars is far younger and they have less cars from the pre-1990s, except for very rich families who could afford to maintain or enthusiasts who import fresh classic/youngtimers from USA.

Infrastructure

KSA prefers sedans more. There are various reasons for that. The main one being KSA already had well developed road infrastructure from the 1980s itself, at least in Riyadh area and main cities. UAE started building proper road infrastructure only by the late 1990s, while Qatar to my horror didn’t have proper dual carriageway highways between their main towns outside of Doha. During my time in Qatar, they were just building a proper highway between Doha and Al Khor, that too for the run up to the 2022 World Cup. Even then felt that the roads in Riyadh made in the 1980s were far more developed and made to a higher standard than the roads made in Qatar in late 2010s. So in KSA, people are used to sedans and will buy SUVs just because they are the latest in fashion not for utility, while in UAE and Qatar they have been used to SUVs far earlier for utilitarian purposes. You will in fact see more 1980s-1990s Jimnys, Pajeros and Landcruisers in Qatar than 1980s Caprice Classics, whereas for the longest time in KSA, SUVs just meant the GMC Suburban and Landcruiser.

A point to note is that the distance between big cities in KSA is 500-1000kms, while in rest of GCC nations you could start from one end and reach the other end within 3-4 hours.

Rules

I first heard of old cars above a certain age being banned in Dubai and Japan. Stricter fitness tests meant Dubai has far more newer gleaming cars while other markets will have a more organic, natural car market with a good mix of old and new cars. Also KSA for a good number of years had a rule that to own a car with 7 seats and above, one had to have more than five members in the family. Not sure if it was just for expats or locals too. So people couldn’t just go and buy a large SUV on a whim, hence many settled for an equivalent full size sedan.

Social

Dubai is far more image conscious than others. Many of my relatives who moved to Dubai from Riyadh post 9/11 bought brand new Lexuses and Cadillacs when they were using normal used cars while staying in Riyadh.

Demographics

While KSA has the biggest economy, if we look by per capita, Qatar will be at the top, followed by UAE. This reflects in their top selling cars. While Qatar and UAE will have the Landcruiser as top selling car, KSA will have Camry as top selling. Others in the GCC may have Corolla or Hilux as their top selling vehicles.

Historical

KSA always had a tilt to the USA, while most of the GCC nations tilted to UK. These had many historical reasons which I may have to read up on. Many of the GCC nations were British protectorates and even used Indian rupees till the 1970s, while KSA was kind of independent after Ottoman rule. The British were satisfied with the oil found in Iran (Persia) and Bahrain and didn’t believe there was oil in Arabia, while the Americans persevered and discovered the world’s largest oil reserves in KSA. This can be seen in the roads and cars. UAE and Qatar has lots of roundabouts, while it is super rare in KSA. UAE also used to have the Indian style of white and black footpaths/kerbs, while KSA just has grey/cement colour all over like USA. These can be seen in the car choices too. Except for Mercedes Benzes and old Peugeots, I really can’t remember seeing European brands regularly on Riyadh roads. Range Rovers are popular in UAE and Qatar, while they are not so popular in KSA. The only Range Rovers/Bentleys/Rolls Royces I have seen on Riyadh roads at the turn of the millennia were by the British embassy or by British expats. UAE has its obsession with the G class, while Saudis just swear by their full size American SUVs.

Disclaimer: All these are from my observations and intuitions only and I really don’t have any data or sources to point to.

Read BHPian comments for more insights and information.