The UAE has made it easy for even expats to own cars. This has led to people exploring car finance options to buy their dream cars.
There are few pleasures comparable to the joy of driving in Dubai. The city’s well regulated traffic and excellent road system make driving a wonderful experience. Though public transport is plentiful, a person living in Dubai would always prefer to have his own car to move around in the city.
Hearteningly, banks in Dubai are very keen on customers exploring auto loan options with them. This translates into attractive options for car finance in Dubai. Banks in the city offer car loans not just for new cars, but also for used ones and to companies that run a fleet car business. The used car market in Dubai is now a burgeoning one, with the costs of swanky new cars becoming extremely prohibitive. Along with the used car market, the rental car market is also picking up pace.
It is imperative to note that one must take car loans in Dubai only if one is certain of repaying it. Banks grant car finance in Dubai for a period not exceeding five years. Also, there are stringent checking processes for each application in response to several cases of bad loans and people abandoning their cars when they begin defaulting on the EMI payments.
You will have to furnish a minimum of 20% of the car’s total value as down payment to initiate the purchasing process. Take a stock of your current finances. If you do not have the necessary amount, it is prudent to wait a while or select a less expensive car. Meanwhile, the bank pays the remaining 80% cost of the car. You can borrow the money at a certain rate of interest for a period not exceeding five years in tenure.
The documents you require for the car finance process are your driver’s license, documentation to prove your residential and work status, passport, insurance papers for the old car (if buying a second car), salary certificate (or CA certificate in case of self-employed businessperson) and six months bank statements. The process moves forward only once the bank verifies all the documentation.
It is better to repay the loan before the tenure period is over. The earlier you repay, the lower will be the repayment amount. You can opt for a lower interest amount payable by choosing a smaller tenure, for example, 36 months instead of 60 months. However, one must exercise this option only when one is confident that one can pay the correspondingly high EMIs.
The bank will advise the applicant on the charges and fees levied on late payment or defaulting on payments. Find out if there are other charges involved, such as processing fees, pre-closure charges, etc.