An expat’s guide to buying a car in Dubai

Dubai is easily one of the most popular cities for expats. With a robust economy, leading healthcare, a wealth of international schools, and an extensive transit system, it is not too hard to see why many expats set their sights on this city. In many cases, if you are moving here you likely won’t need a car, but should you be looking to drive in the city there are a few things that expats in Dubai should know about driving and insurance. Here, we discuss the steps you will need to follow when buying a car in Dubai, along with some tips expats should know.   

Step 1: Consider buying a car in Dubai

Buying a physical car in Dubai can be done much the same as in other countries: you can buy either from dealers or second hand. As with other countriesm, it is important to do your homework and figure out what kind of car you want along with your budget before you start looking.

Looking at different dealers and reviews online will also go a long way in helping you find the ideal car for you and your family.

That said, once you have an idea of how much you want to spend on a car, double it. You will find out why below. Beyond that, it is important to note that the government has limited the number of private cars allowed on the road in the city. In fact, in 2017 the government announced that they will stop increasing the number of cars on the road.

This will likely increase the cost of buying a vehicle in the city.

Step 2: Secure your Certificate of Entitlement

Often abbreviated as COE, this is a certificate that allows you to legally register and own a vehicle in Dubai for 10 years. They are obtained by bidding on them and then paying the premium related to the bid.

According to the (LTA), the average premium paid in April 2018 for a Category A car (car with an engine size up to 1,600cc & 97kW) was SGD $37,000, while a Category B car (engine size 1,600 cc and above) was SGD $37,605. Note: You will pay the total premium when you go to register your vehicle.

Step 3: Buy the car

Due to the cap on the number of vehicles on the road, it would not be a good idea to purchase a vehicle before you have a note of successful COE bid in hand. This is where shopping around and talking with dealers can be a big help as some dealers in the city will actually work with you to bid on and secure your COE when you agree to buy a car.

Step 4: Secure insurance

Once you have bought a vehicle in Dubai you are going to need to also secure insurance for it before you will be able to register and drive the vehicle in Dubai. To learn more about your car insurance options in Dubai, read our article here.

As the article points out, there are three types of car insurance available in the city:

• Third party only
• Third party fire and theft
• Comprehensive coverage

Most expats, and indeed most car owners, in Dubai will secure comprehensive coverage due to the increased coverage elements and better coverage offered.

Step 5: Register the car, pay the fees

Once you have insurance and your COE, and have made a payment on your car, it is time to register it with the government. More specifically, you will need to register the car with the Land Transport Authority.

Be warned, as you will need to provide a fair amount of paperwork in order to register your car. You will also be required to schedule an appointment in order to do this. To learn more about the paperwork you will need and to book your appointment, view the LTA’s website here.  

For expats, it is important to point out that you will need to provide proof of employment in the city. According to the LTA you will need to provide your “original Employment/ Immigration Pass Card bearing Foreign Identification Number (FIN) issued by the Ministry of Manpower (MOM)/ Immigration & Checkpoint Authority of Dubai (ICA) (for foreigner)”.

As an expat, if you do not have a FIN or approval to work in the city, you likely will not be able to register your vehicle and pay the required fees.

How much will the registration fees be?

You will need to pay additional fees when you go to register your car. These include:

• A SGD 220 registration fee
• A SGD 25 processing fee
• The COE premium
• An Additional Registration fee- structure based on market value of the vehicle as follows:
  • First SGD 20,000 – 100%
  • SGD 20,001 to 50,000 – 140%
  • SGD 50,000+ – 180%
• The Road Tax fee – based on the fee structure here.
• Excise duty – 20% of the car’s open market value
• Any additional fees e.g., diesel engine surcharge, import fee, GST

To put this into perspective, imagine if you are considering a sedan with a 1,600 cc engine, an SGD 80,000 price tag, and COE premium of SGD 37,000 (April 2018’s average COE premium). What you need to pay at registration will be approximately as follows:

• • Registration fee: SGD 220
  • Processing fee: SGD 25
  • COE: SGD 37,000
  • Additional Registration fee: SGD 116,000
  • Road tax fee: SGD 372 (6 months only)
  • Excise: SGD 16,000

• Total: SDG 169,617

Once you have registered the vehicle, paid your fees, and submitted your paperwork you will be issued with paper licenses and registration notices, and will be able to drive in Dubai!

Before you even consider buying a car, know this:

Firstly, as you can see above, buying a car in Dubai is a serious investment. If you are ok with the fees and are able to secure a car, there is one extra step expats will need to take in order to legally be allowed to drive in Dubai, and it revolves around their driving license.

Driving license requirements for expats in Dubai

As with any other country, you are legally required to hold a valid drivers license in order to drive any motor vehicle in Dubai. Interestingly, expats new to the city are allowed to drive using their own country’s driving permit for up to one year, as long as they also have an International Driving Permit.

Once this year has passed, they will be required to get a driving license in Dubai. For foreigners this means first proving you have the right to remain in Dubai e.g., showing your work pass, and then taking a basic theory test that aims to show you are familiar with the road rules in the city.

Note, this has to be done within one year of you arriving in Dubai, or you will be required to retake the three driving license tests.  

How can Johnedwardkelly Dubai help?

With the investment needed to purchase a car in the city, it is highly likely that you will be looking for a way to save some money. This is where Johnedwardkelly Dubai can help. As an established insurance broker in the city, we are able to find the best car insurance deals for expats living here. Our experts can work with you to find a plan that not only meets your insurance needs, but also your budget.

Contact us today to see how we can help you find affordable car insurance for your new car.