DUBAI // The value of a new car now drops by as much as 55 per cent the moment it is driven off the forecourt, because the economic slump has left the market flooded with used vehicles.
At the same time, there has been a surge in the popularity of auctions, which offer quick sales at low prices.
Owners who have lost jobs or are struggling to make ends meet are either trying to sell their cars or abandoning them altogether.
Last year, the value of a new saloon or 4x4 fell immediately after purchase by about 20 to 35 per cent. This year, the loss is between 35 and 55 per cent, according to Pradeep Ramakrishnan, the head of used-car operations at Swaidan Trading, the Peugeot dealer for Dubai and the northern emirates.
"They have fallen drastically," he said. "The market is very erratic but, basically, this drop is because many used cars are on the market.
"Most of these cars have been financed by the banks. Their owners have either taken salary cuts or completely lost their job, and they're no longer able to afford their vehicle.
"So you're seeing more come on to the market."
The fall in value of new luxury cars was even greater, he said - at least 55 per cent - because so many people wanted to get rid of them.
That was confirmed when, in one day, The National spotted more than 60 cars, many high-end vehicles, abandoned on the streets of Dubai. Many had fines outstanding.
There had been an "increase in defaults given the market conditions", said a spokesman for HSBC. He declined to say what percentage of its "non-performing" loans were the result of defaults on car debt.
Standard Chartered said: "The group has continued to de-risk the loan book by focusing on secured assets. We have tightened our underwriting standards and reshaped the unsecured business away from high-risk segments."
Niranjan Mendonca, the head of retail assets at Mashreq Bank, said it had "observed a marginal increase in non-performing loans over the past six months. However, this increase is not very significant".
Last week Mashreq introduced a programme to help customers struggling with debt because, it said, consumers were increasingly starting "to feel the pressures of an economic slowdown".
Most vehicles repossessed by banks end up in Dubai's burgeoning auction industry, where they are sold at rock-bottom prices.
According to a veteran Dubai auctioneer and debt collector, who declined to be named, the number of auction houses trading in cars has risen from two to five in a year.
The increase was fuelled by the unusually large number of cars coming on to the market, primarily because people could not pay off vehicle loans, he said.
"I'd say there's more than three times the number of car sales at auctions this year than last year." Most auctioned vehicles went to other Middle Eastern countries or Africa, he said.
Auctions had become popular with the banks because they yielded "fast cash and fast sales - and there's more margin", because sale prices were so low. "It's expensive for banks to repossess cars," he said. "They have to pay for transportation costs and storage. They want to sell it fast, and get fast cash."
Banks were also responsible for outstanding fines on repossessed vehicles. "I've seen some with Dh25,000 (US$6,800) of fines," the auctioneer said.
A spokesman for Al Futtaim Automall, the used-car division of Al Futtaim Group, which has branches in Ras al Khaimah, Sharjah, Dubai and Abu Dhabi, confirmed that vehicles were depreciating more this year than in 2008.
However, he said this could also be attributed to special offers for new-car buyers, such as free insurance or registration, which could constitute five to 10 per cent of the total value.
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Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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England's lowest Test innings
- 45 v Australia in Sydney, January 28, 1887
- 46 v West Indies in Port of Spain, March 25, 1994
- 51 v West Indies in Kingston, February 4, 2009
- 52 v Australia at The Oval, August 14, 1948
- 53 v Australia at Lord's, July 16, 1888
- 58 v New Zealand in Auckland, March 22, 2018
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded