To own a car without letting your savings take a big hit means you have to take a car loan. In the UAE, that’s easy business as the interest rates are really low, and banks are very customer friendly. Ijarah is also an excellent option through which one can secure a car loan and through that – a car.
Securing a car loan in the UAE is easy for UAE nationals, and expats are usually either too afraid to request a loan or are too uninformed about what the different procedure is to secure a loan.
As an expat, taking a loan for a car in the UAE requires nothing more than a few extra documents and the fulfilment of a few extra conditions.
Car Loan for the Expatriates
Everyone wants to purchase their dream car at some point in their lives and it is not hard if you have the resources. But buying a car as an expat in a different country can be a little more of a challenge. UAE has limited public transport and hence, many expats are opting to buy their own cars as it is also seen as a symbol of status. But it is important to know everything about purchasing a car if you are an expat residing in UAE since you will be opting for a car loan for purchasing the car.
Key points to remember if you are an expat purchasing a car in UAE
Listed below are the key points an expat has to remember if they are purchasing a car in UAE.
Type of Car - The first thing you should decide is the type of car you want to buy. Decide if you want to buy a new car or a used car. Though more often than not, expats go for new cars, a used car will be a better option as you’ll be using the car only for a short period of time. Deciding on the type of car you want to buy beforehand will make the process of purchasing a car much easier.
Where to buy it? - Once you decide on the type of car you want to buy, the next step is to zero in on the place you are going to purchase it from. An expat can not only purchase a car from a dealer but they can also try private sellers and trade-ins.
Financing the Car - The best way to finance your purchase of the car if you don’t have the financial resources is to go for a car loan. Many banks in UAE offers car loans designed especially for the expats in UAE with unique features to suit your requirement.
Resale value of the Car - It is a known fact that expats tend to exchange their car for a better one during their stay in UAE considering the amazing options available. In such case, it is important to opt for a car with a good resale value.
Verify - Once you zero in on a car, it is important to check with the UAE police to ensure that the car you are purchasing is not a stolen vehicle. It is also a wise move to check if the number on the registration plate of the vehicle matches the number on the document papers.
Documents Required for a Car Loan for Expats in the UAE
Listed below are some of the important documents an expat might have to provide while purchasing a car in UAE
- Passport Visa page – So as to prove that you have not entered the country illegally.
- Payslips for the last 2 months – Payslips as a proof of income and employment.
- A valid UAE driver’s license – A Driver’s License as evidence that you can not only handle a motor vehicle under UAE’s strict driving laws, but have also acquired an official document that verifies your identity.
- Company ID Card – This is required only if your Visa has been issued from a Free Zone or Media City.
- Labour Contract – To give the bank an understanding of when your contract started and when (if) it will expire.
- Labour Card.
- Updated salary certificate – You will need this in case you wish to take a loan for a higher amount, based on the fact that you now have a higher salary. You will need to submit your Labour Contract showing your old salary as well.
- Company Trade License – As an evidence that the company you claim to work for actually exists as a profitable entity as allowed by the Government of whichever Emirate you’re in. You will need to submit all pages of this document.
- Residence permit
- Application form for the purchase
These are the documents you’ll need if you plan on buying a new car from the showroom, but if you need the loan to purchase a second-hand or used car, the seller of the car will need to have the following documents ready:
- Passport Visa.
- Car Registration – to prove that the car is legally allowed to be in the UAE, by being registered by the appropriate body. You will need the Mulkiya, front and back copies.
- Ownership document – as proof that the car indeed belongs to the person who wishes to sell it, it also serves to prove that the car is free of any loan or Ijarah.
- Evaluation certificate.
Securing a car loan as an expat isn’t a tiresome process, but it does require the submission of a few more documents. In the case of most loans apart from personal loans, most banks don’t really care if you’re an expat or a resident, as long as they’re convinced you can pay it back. Approvals of personal loans in the UAE are far more dependent on your residential / expatriate status than car loans. Most banks that offer car loans also offer expat car loans, here are a few banks that have car loan products for expats:
While you are here, you may have a look at these:
All the top banks in the UAE offer car loans with lots of attractive features and a wide range of benefits. But out of so many, only a few have made it to the top.
There are many financial institutions in the UAE which finance 100% of the loan amount, and you do not need to pay any down-payment while buying the car.
The banks in the UAE offer NRIs staying there to apply for a car loan, especially designed for them, in India for their family or for their personal use. The car loans are modified to make it easier for the NRIs to avail the loans.
The banks in the UAE provide car loans even for buying commercial vehicle(s). Even these offer a wide range of benefits like high range of financing, flexibility of down-payments and longer tenures.
Car Ijarah is another term for Islamic Car Financing in the UAE. It differs a lot from the conventional banking mode and is based on the Sharia principles of the Islamic law.