November 29, 2023

One Posting Everyday

UAE’s new residents drive automobile leases, subscriptions as value of shopping for turns main issue

5 min read

Dubai: Guess who’s fuelling a increase for the automobile rental – and subscription – enterprise within the UAE lately? The rising numbers of latest residents within the nation, who for the preliminary months, at the least, favor to lease/subscribe their set of wheels slightly than purchase.

Plus, extra firms are providing the perks of a leased automobile together with different advantages within the package deal, executed with the intent to offset what inflation prices would have on the person’s take house. “For a sure sort of employer, providing a automobile is now normal for his or her mid- to senior appointments,” mentioned the top of a recruitment agency. (Additionally, extra job contracts are seeing elevated contributions by the employer to the cost-of-living allowance and for rents too.)

No matter be the case, the profile of these renting a automobile by way of digital portals or the bodily leasing agency is altering. Nicholas Watson, CEO and co-founder of rent-on-demand platform Udrive can vouch for that.

“Probably the most elevated utilization has been within the bigger automobile section resembling SUVs and household autos primarily pushed by extra new arrivals to the nation,” mentioned Watson. “Whereas the resident consumer base of our service is the most important, we’re additionally seeing extra demand from enterprise vacationers and ‘transients’, individuals coming for prolonged stays.

“Udrive acquires automobiles from leasing companions who in flip purchase from companies and producers,” mentioned Watson. “The secret is we’re offering gross sales quantity for them. After we on-board, we do it in batches of fifty and 100 items — that’s a whole lot of new gross sales for an company or manufacturing.”

“Our common utilization is 85 per cent residents and 15 per cent vacationers. We’re seeing this transfer to 80:20. As we proceed so as to add autos, we count on to see extra availability of autos for non-residents over the rest of the 12 months.”

Denting new automobile gross sales

Time was when new automobile dealerships had the heartbeat on model new expats within the nation. And shopping for a automobile was – if that they had the price range – among the many first issues these newcomers would undergo as quickly as that they had the license. Not anymore.

“The customer profile is altering, and we’re seeing will increase within the numbers who simply need lease a automobile or turn into month-to-month subscribers (and with the choice to vary their automobiles),” mentioned the CEO of a number one dealership in Dubai. “It’s not simply among the many younger – there’s much less inclination to purchase new even amongst older demographics.

“Nowadays, no dealership might be with out a sturdy used-car operations or have rental or subscription providers.”


Nowadays, it’s not simply shopping for a brand new automobile that comes with a better value component to it – showroom worth, larger insurance coverage, and many others. Second-hand automobile costs have held their very own by way of this era, particularly on pre-owned autos of one- to 3 years.

In relation to luxurious fashions, the value hole has narrowed even additional, trade sources say. In such a situation, potential new automobile patrons are taking part in the ready recreation for costs to chill down.

Till then, renting or subscribing to a automobile is OK. If their employers helps with offering a leased automobile, even higher.

10% development

For now, new automobile gross sales within the UAE is taking good care of itself. Yr-on-year will increase are pegged at 10 per cent or extra, however extra dealerships say it’s unlikely that development will head into the 20 per cent and extra vary, which was seen within the early a part of the final 10 years.

Stock - Udrive
The price of possession and modifications in shopper behaviour have synced to tug down curiosity in shopping for new.

“Proudly owning a automobile isn’t nearly shopping for it – there’s insurance coverage, parking gasoline, upkeep, harm and depreciation that each one should be factored in,” mentioned Watson. “Until you might be driving for over 1.5-2 hours a day, proudly owning a automobile actually doesn’t make sense.

“It primarily turns into a disposable earnings dialogue. Hardly anybody buys DVDs and Microsoft Workplace CDs anymore — it’s all on-demand and subscription-based, pushed by technological innovation.”

Rental charges too are gaining

However automobile rental charges too have been on the march. Operators cite the rise in automobile costs since late 2020 as the primary purpose. Companies must go on the prices to the buyer, and that is what has occurred.

“Your common financial system sedan has elevated from Dh38,000 to Dh48,000 over the past 12 months,” mentioned Watson. “As leases are an enormous value driver, it impacts the rental worth per minute or day by day.”

Charges have ‘stabilised’

Soham Shah, CEO of, has a distinct view on rental tariffs. He says the surge in lease charges primarily passed off throughout the Expo part and instantly after. Plus, there was the worldwide scarcity in chip availability and which hit carmakers on the manufacturing facet.

“That created excessive automobile quick provide, and consequently, total automobile prices reached its peak,” mentioned Shah. “Nonetheless, since Q1-23 this has undergone a correction.”

Soham Shah
“We’ve got noticed a big uptick in forecasted subscription and on-demand automobile lease by way of our lease professional mannequin, in addition to on-demand automobile leases within the month,” mentioned Soham Shah of “This may be attributed to the uncertainty on rate of interest rises, inflicting customers to hold-on to creating purchases and search on-demand mobility choices.”

“Contemplating that there was a rise in rates of interest, the market has witnessed lowered demand for automobiles. This may in the end result in extra availability with rental fleets. “Because the market corrects, clients can count on to see a lower in rental and subscription prices.” companions straight with producers, dealerships, and leasing firms within the GCC. Its app thus present customers with entry to a spread of autos and lease choices. “Our platform has seen renewed demand for versatile and reasonably priced mobility,” mentioned Shah. “By providing a spread of subscription and leasing choices, we’re in a position to present customers with a cheaper various to conventional automobile possession.”

Copyright © All rights reserved. | Newsphere by AF themes.