We recommend new expat arrivals should lease cars in Dubai. In particular, expats from US, UK and other Western countries should strongly consider this option. Why? Here are five reasons:

Why new expats should lease cars in Dubai

Paying less cash upfront

Cost of buying a half decent car (new or used) is around 100,000 AED. Anything less and you will have issues cropping up faster than you can say ‘I should have leased a car instead!’. Since you are a new expat, you will either pay full payment upfront or a significant amount upfront because you don’t have 3-6 month bank history to qualify for attractive car loans. Even if you do qualify for car loans, you’ll have to pay at least 20,000 AED upfront cash. For any new expat arrival in Dubai, it is essential to save cash, especially if the new expat is planning to set up a business or plans to be self employed. When expats lease cars in Dubai, they pay monthly car lease payment of around 2,500  – 3,000 AED for a decent car like Toyota Camry or Honda Accord.

Security in uncertain times

Dubai workforce is notorious for high turnaround ratio. This means a lot of expats come and go out of Dubai every few months before they finally settle down. In such a scenario, it is much more convenient to lease a car for the first year. If plans change, the lease contract can be terminated quickly. Lease contracts are very easy to terminate in Dubai, with cancellation penalty of 2-3 months maximum.

Saving time (and time is money)

Every minute counts in Dubai and new expats need time to settle down. Why add a new set of tasks in buying a car? The hassles of owning a car include regular servicing runarounds. Here in Dubai, most car services are done every 5,000 kilometers. This means at least one service trip per month!  Add to that:

  1. RTA trips for Tasjeel registration / renewals
  2. Car insurance comparisons and haggling
  3. Car insurance company giving you trouble on nominal car accidents
  4. Not having a replacement car after an accident and finding one yourself
  5. Meeting prospective buyers when selling the car
  6. Advertising the car in all kinds of classifieds websites and so much more.

Time SAVED is time INVESTED in more productive work that will generate revenue. So save your time and save your money in the process.

Quick Math: Buy vs. lease cars in Dubai

1 Year Leasing Cost:

Monthly lease amount for 2017 Nissan Sentra: 1,700 AED

After 1 year total cost incurred = 20,400 AED

1 Year Owning Cost: 

  • Cost of buying a 2017 Nissan Sentra = 60,000 AED (Upfront)
  • Down payment (20%) = 12,000
  • EMI for 12 months (AED 1,200 /month) = 14,000
  • Cost of servicing per year = 1,500 AED
  • Cost of insurance = 1,500 AED
  • Cost of RTA registration = 500 AED
  • Cost of Salik = Not Included
  • Cost of Advertising to sell the car = Not Included

Considering the resale of the car to be 40,000 AED  and your outstanding loan to be roughly 35,000 AED.  Total cost of owning a car for one year is 24,500 AED vs 20,400 AED for leasing.

So leasing a car will be less expensive (worst case very close) compared to the cost of owning a car without any of the hassel.

Of course as the length of time increases the cost of ownership goes down, but in most cases the cost of owning a car for 1 year generally exceeds the cost leasing the car.

Less capital expenditure for new companies

For new SME companies and startups in Dubai, car leasing is an attractive option as well. Capital expenditure, or CAPEX reduces. The entrepreneur saves cash for increased working capital which is super important. The new business owner doesn’t have to worry about car maintenance and sale of the car after a few years. The leasing company will give a replacement car if required as well so work doesn’t stop. Yes it’s possible in the long run of 3-5 years it’s better to own a car. The drawback of leasing for over 2-3 years is that you don’t own the car so over time your total expense might be higher. Having said that, used cars resale prices are dropping due to economic issues globally. As a result, car ownership even over 3 years may not prove to be viable compared to leasing. Food for thought!

Use Ejarcar’s free lease finder and compare quotes from over 70 rental companies to get the best deal.