With zero per cent interest for the first year, zero per cent down payment and low-interest financing, buying a car in the UAE has never been easier, thanks to new schemes unveiled by dealerships aching to recover from the recent slump.
Back from their post-tsunami woes, Japanese dealerships today are leading the pack with easy-on-the-pocket offers.
For instance, Toyota-Al Futtaim has offered inclusion of the 20 per cent down payment mandated by the UAE Central Bank since May 1 in the monthly instalments.
Until recently, car dealers were in despair due to a slump in demand as few people were able to raise the down payment upfront.
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Now, a customer can drive away a Dh100,000 4x4 vehicle by shelling out Dh1,599 in down payment and paying the same amount for the next 24 months. He can either choose to either return the car at the end of two years and drive a new one or pay the rest of the amount at a pre-agreed price. "Yes, that's all (Dh1,599) the down payment a customer needs to give to drive away a RAV4," said Simon Frith, Managing Director, Al-Futtaim Motors. "We've simply made it possible for our customers to avoid a big cash outlay at the front end of it, yet stay within the Central Bank guidelines."
For a car like Toyota's best-selling Corolla, a buyer simply puts in Dh999 down payment, followed by Dh999 over 24 months under the "Choices" scheme, rolled out in May. Frith hopes this scheme will account for 25 per cent of 2011 sales, while the deposit-solution would give it a further boost.
"I'd like to think this is a new chapter in car financing, but what we've done is to simply respond to what our customers had been telling us," said Frith, adding Al Futtaim is not far short of the pre-tsunami target of 100,000 unit sales in the UAE "even now".
This Ramadan, Toyota is giving a cash prize of Dh1 million to a lucky car buyer, in addition to an Apple product with every unit.
Not to be outdone, other dealerships have announced aggressive Ramadan discounts and promotions to boost sagging sales.
Arabian Automobiles are offering Infiniti cars at zero interest for the first year and zero instalment for the first six months, though that's subject to bank approval.
Auto loans from Al Nabooda start from 1.99 per cent interest for Audis and 3.39 per cent for Volkswagens, while Al Habtoor, UAE's Mitsubishi dealership, offers a 3.5 per cent interest on new car purchases.
Local car dealers feared the 20 per cent deposit mandated by the Central Bank could dampen demand, but it turned out this fear was premature.
"There's no doubt that when it was announced, our sales were reduced. And we've had post-tsunami issues in Japan," said Frith.
Other dealers said that since customers didn't really understand what was going on, many decided not to buy until they are fully conversant with the new rules.
Nissan's "Freedom" offer now allows buyers here to make a 10 per cent deposit in cash or credit card, and the other 10 per cent in six post-dated cheques interest-free. "Our sales were stalled briefly after the new rules, but since then, we're back to normal," said a Nissan salesman. "The rest of 2011 is a recovery period, barring any natural calamities."