# Cheapest way to have car for 2 or 3 years



## JTT (May 30, 2011)

Hi,

I will be moving to Dubai for 2 maybe 3 years shortly and will obviously need a car for this period.

I'm after some advice as to what would be cheapest way over this period of time. I don't want to lose a fortune in depreciation or service costs and as petrol is cheap, I'd to make a saving here. Plus don't really want to spend a fortune on insurance.

As I will be in Dubai for a relatively short period, I'd rather drive something without costing me a fortune, hopefully save a bit of cash and get a decent car when back in the UK that I will keep for a few years.

I hope this makes sense, we have our first child on the way, so something safe and where you can get a buggy in the boot, and a rear seat access for car seat.

What would people recommend? Buy a new car that doesn't depreciate too much? Buy an older car in private sale and hope it doesn't go wrong? Buy a nearly new car and let someone else take the depreciation hit? Rent a car?

Also, are there any specific cars that depreciate less than others in Dubai?

Sorry for the long thread and thanks in advance for any help.


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## Confiture (Jan 9, 2011)

Assuming you want something quite decent, both Honda and Toyota have finance packages at the moment based on the deposit > payments > final balloon / hand back.

The benefit here is free insurance, long warranty and inclusive servicing. The latter is a benefit because of the short service intervals (6-10k).


You can go into the second hand market, but then you'll have to fund all the extras above.


Otherwise it's a rental:

Around 2kdhs per Month for a new Camry / Accord
Around 4kdhs for a Rav4 / CRV
Around 5kdhs per Month for a Pajero / Prado


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## zin (Oct 28, 2010)

Hi JTT, good question. Let me try and do the math for you over a 3 year period.

If you rent a pile of crap (see Lancer or Yaris) and this is ok for you then let's say the cheapest you find is 1500AED per month. This would include any breakdowns, insurance etc... so in theory there would not be any additional costs, although I think they add an extra dirham on top of the normal SALIK charge and an extra admin fee on top of any speeding offences, but again this is minor stuff.

So over a 36 month period you will pay 54000 AED.

Now if you buy a new car, I will use a Honda Jazz in this example as we have bought one on a 3 year loan . The car cost I believe was 69000 AED however with interest over 3 years we are paying around 77000 AED so let's say 2150 AED per month. Also note we pretty much put every add-on on the car, i.e. fastest model, panroamic roof etc... the basic model was around 52000 AED. After 3 years with depriciation the car will be worth around 40000 AED so if you sold this after 3 years you would essentially have paid 37000 AED in total for the car. 

If you add insurance (and you can shop around and drop this price significantly) we went with the RSA however did not have a no claims and as the car was registered under my wife who only had a license for a few months the quote was high, I believe around 2000AED per year. Even if we ignore that we got the first year in for free as part of the deal for the car this would work out to another 6000 AED over 3 years so the price now comes to 43000 AED.

Car registration I think is another 300 AED a year so let's just say 1000 AED over 3 years brings the price to 44000 AED. Services are 250 to 500 AED depending on the km so 5000k, 10000k, 15000k etc... upto around 50000k over 3 years (again depending on your commute). Let's just say 350 AED average over 10 services, so another 3500 AED. 


Total price I work out to 47500 AED.

So essentially 54000 AED to rent a second-hand Mitsubishi Lancer (on 1500 AED a month, I think they may even go for 1700 AED) vs around 47500 AED to buy a new Honda Jazz give or take (probably less) a few thousand dirhams (you could sell it for more or sell it for less depending on urgency - a basic model 2009 Honda Jazz goes for 39 to 45k right now on Dubizzle). 

I guess it all depends upon what you want to drive / willing to spend etc... I have colleagues who have rented for years and have all sorts of problems with getting the rent company to fix issues, by owning a car you cut out having to rely on them but have to organise any fixing yourself with the service center / body shop etc..


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## Mr Rossi (May 16, 2009)

Zin makes a very good case but omits the fact that you can go to prison should you fail to keep up payments on the car.

If you don't have the cash upfront to buy a 2 year old car in the private market (literally thousands of them for sale), I'd borrow the money in your home country. If neither is an option I'd recommend renting.


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## JTT (May 30, 2011)

Cheers guys, thanks for your responses.

I have some capital available, maybe 10 - 15k GBP which I don't mind using as long as it gives me a better return on that investment, ie not using finance

I would be able to keep up any payments over the 2-3 years, so defaulting on a payment wouldn't be an issue, although I'm not sure if the finance rates are good in Dubai, or its better to pay up front and avoid high APR's?

In general do Japenses cars depreciate less out there? I would be willing to buy new or nearly new second hand (with warranty) depending on whch gives me best bang for buck and best ROI over 2/3 years.

Tricky one to work out. I love my cars (jusy had to sell my BMW 335d and black armband is still on), but don't want to waste my money. I'd prefer to be conservative (I think) for a couple/3 years and get myself something nice with the saving once back in the UK.


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## JTT (May 30, 2011)

zin said:


> Hi JTT, good question. Let me try and do the math for you over a 3 year period.
> 
> If you rent a pile of crap (see Lancer or Yaris) and this is ok for you then let's say the cheapest you find is 1500AED per month. This would include any breakdowns, insurance etc... so in theory there would not be any additional costs, although I think they add an extra dirham on top of the normal SALIK charge and an extra admin fee on top of any speeding offences, but again this is minor stuff.
> 
> ...


On insurance, can I use my UK no claims bonus in Dubai (9 years)? Or will I start from scratch?


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## zin (Oct 28, 2010)

You should be able to use your UK one, don't see why not. There's companies like AXA and the RSA which are international.


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## Vetteguy (Jan 3, 2010)

JTT said:


> On insurance, can I use my UK no claims bonus in Dubai (9 years)? Or will I start from scratch?


Yes .. Just get a letter from them stating as such. I did from my ins. company in the USA and it was good...


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