Personal Finance

Buying a used car in the UAE? There’s a loan for that

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So you’ve decided to buy a used car in the UAE. After all, shopping around the second-hand car market means you get a lot more for your money than if you buy new. And having done your due-diligence, you’ve settled on the motor you want. It’s a well-sorted car – good-looking, relatively new, fast and well-equipped. And it comes at a great price. Now all that’s left to do is sort out the finance for it.

Unfortunately, getting finance for used cars in the UAE is a task easier said than done. For example, some banks will prefer to provide finance for new cars, and will offer higher interest rates for used cars. What’s more, some banks may only offer finance for a used car up to a certain valuation, meaning, if you really want the vehicle you’ve set your heart on, you’ll have to make up the difference in cash.

RELATED: THE ULTIMATE GUIDE TO BUYING A USED TOYOTA CAMRY

The process of obtaining used car finance is fraught with problems such as these. Happily, there are ways of getting around them relatively painlessly. Some banks in the UAE have introduced auto loans tailored specifically for used cars, and they help borrowers sidestep the usual issues. So, for your benefit, we’ve rounded up the best of the UAE’s used car loans. If you’re buying a second-hand car sometime soon, the below may come in handy.

ADIB Car Finance

If it’s a quick approval process you’re looking for, ADIB’s Car Finance is the loan to go for. Rates are slightly higher than the HSBC loan above, coming in at 3.99% flat or 7.23% reducing per annum. Still, you won’t need a salary transfer account with the bank, and you’ll get a free ADIB Visa Cashback card. What’s more, ADIB will help you with insurance, providing takaful for low contribution amounts. The bank will alos throw in free job loss protection and a free postponement option.

Minimum salary: AED 8,000
Salary transfer: No

Click here to apply!

RAKBANK RAK Auto Loan

RAKBANK says that its auto loan ensures minimum formalities and flexible repayment periods, meaning it’s ideally suited to taking out finance for a used car. And with a flat interest rate of 2.7% per year and a reducing rate of 4.98% per year, it’s certainly a good option for those looking for low-cost finance. However, there are caveats to this loan – there are charges whenever you want to change payment terms. For example, to request an installment deferment, you’re looking at AED 100, and late payment of installments results in AED 300 to AED 550 charges. There are a host of other charges, too, so be sure to read the fine print before signing on the dotted line.

Minimum salary: AED 5,000
Salary transfer: Yes

Click here to apply!

RELATED: HOW TO BUY A USED BMW 3-SERIES

Mashreq Car Loan

This is another car loan that comes with competitive interest rates – 2.35% flat or 4.31% reducing. You’re also given a choice of Islamic or conventional financing, and you can borrow up to AED 500,000 – so long as that number doesn’t exceed 80% of the car’s value. Mashreq also promises quick and easy processing, as well as special rates on vehicle insurance. Oh, and you won’t need a salary transfer account to apply for this product, though Mashreq will throw in a free current account with no minimum balance.

Minimum salary: AED 5,000
Salary transfer: No

Click here to apply!

RELATED: SECOND-HAND BUYER’S GUIDE: MITSUBISHI PAJERO

Don’t see the right car loan for you here? Click the button below to compare dozens of auto loans from the UAE’s leading banks. 

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