Buying a car in the UAE? You have two options when it comes to payment, paying the full price in cash or the option to finance a car via the bank. Financing a car is the easier of the two options when buying a car, as walking around with 10’s of 1000’s of Dirhams is probably not the best idea for a number of reasons.
Other alternatives are cheque, part trade-in and credit card. You can find more info about those options here.
With that out of the way, let’s get into how to finance a car in UAE.
What documents you need to finance a car in UAE
- Original Passport and Emirates ID
- Salary certificate
- 3-6 months bank statements (Most finance institutes will take 3)
- Driver’s license
- Valuation certificate (used cars only, if new, a quote from the showroom or an LPO)
Note: You don’t have to get a loan from the same bank you currently bank with.
Note 2: Select banks may ask for other documents including employment contracts.
In the UAE, to finance a car, you must be at least 21 years old. Minimum salary requirements vary from bank to bank but usually start at AED 3,000 to AED 5,000.
Certain banks allow car buyers to obtain a bank loan for new and used cars for up to 60 months. Depending on the age of the vehicle, this may not be applicable.
Banks only finance 80% of the car’s value. This means you’ll have to pay a 20% down payment in advance. This payment is mostly paid to the bank, although some may require you to give the down payment to the seller directly before the bank finances the rest.
Most banks also have a minimum amount that they will finance, which is usually AED 20,000. As banks finance 80% of the vehicles price, this means the car you plan to buy must have a minimum value of AED 25,000.
Valuation certificates can be obtained from specialised dealers across the UAE. Select banks have their own list of dealers that they prefer and trust, you’ll have to use one of them.