Increasing demand for new and used cars, low profit rates or interest rates, increased number of offers from banks and private finance companies and easy accessibility to loans are the key factors that contributed to the growth of car finance market in UAE.
The report titled “UAE Car Finance Market Outlook to 2021 – Rising Car Finance Penetration and Multiple Car Finance Products Offered by Banks to Foster Market” by Ken Research suggested a positive CAGR in terms of credit disbursed in car finance market in the next 5 years till 2021.
The UAE car finance market is known for Islamic financing with the exclusion of ‘riba’ which means interest. Majority of banks and private finance companies follow the Islamic principles of financing. The market has been displaying a growth trend until 2015 supported by factors like growing demand for new and used passenger and commercial cars, rising SME automotive sector, easy accessibility to finance, variety of offers from dealers and banks and such other factors. The value of used cars has seen a consistent rise in the recent years. During 2011, the average cost was AED 63,000 for new cars which had reached AED 70,000 by 2016. Used cars in UAE is generally expensive than used cars in Latin America, Asia and Africa. This increases the amount of credit disbursed for used car finance. By the end of 2015, the market started displaying a declining trend due to the fall in the sale of new and used cars resulting from the economic slowdown of the country due to falling oil prices. The economic slowdown has also affected the car finance market. The lower oil prices have resulted in weaker deposits for most of the banks in UAE which led the banks to be more focused on the consolidation rather than growth. The banks started being more cautious on consumer lending such as car loans.
Over the past few years, there had been a rise in the rate of non-performing loans which has induced the Central Bank of UAE to appoint an assessor of individual and corporate credit worthiness named Al Etihad Credit Bureau in 2014. The introduction of consumer credit data from the bureau has led to more cautious lending policies.
Key Topics Covered in the Report:
NBAD UAE Auto Finance
Used Car Sales in the UAE
Financing a Used car in UAE
Compare Auto Loans in the UAE
Auto Finance Opportunities in UAE
Top UAE Car Loans Banks
Car Financing Option in UAE
Vehicle Financing in the UAE
Used Car Financing in the UAE
New and Used Car Financing in UAE
For more coverage click on the link below:
Related Reports by Ken Research
Contact:
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-124-4230204
