Dubai’s used car market has experienced a significant decline in prices during 2023 and the trend is expected to continue this year, according to AlgoDriven, a leading, Dubai-based automotive data platform.
AlgoDriven’s data shows average depreciation over the year of 14.8% – a startling year-on-year fall – with 2022 only recording a 2.5% drop. The significant price fall reflects a softening in the used car market as new car inventory levels increased post Covid’s impact on the automotive industry’s production levels, it says. AlgoDriven’s data also shows used cars were selling almost twice as fast in the market at the end of 2023 as they were at the start of the year. On average, it only took 19 days for used cars to sell in December.
For UAE buyers seeking cars holding their value most optimally, AlgoDriven’s data shows the highest residual values for the Toyota Prado, the Honda Accord, and the Jeep Wrangler – based on a three-year period. In the luxury market, the data reveals the BMW X5, the Porsche 911 and the Land Rover Range Rover Sport are the best options.
Abhinav Gupta, CEO of Gulf Region at Cars24, said the used car market was quite static in 2023.
But he expected that Ramadan is a peak time for car sales in the region and they’re estimating a 10 per cent growth overall from last year.
Gupta revealed that Cars24 bucked the trend, recording a 15 per cent increase in inquiries and 10 per cent growth in units sold. Since its foray to the UAE in 2021, Cars24 has sold over 15,000 units.
The UAE is one of the largest used car markets in the region, thanks to Dubai’s position as a major export and re-export market for vehicles to Asia and Africa. Of late, Chinese carmakers have also been increasing their market share, introducing new models in the local market. In the electric vehicle (EV) market, uptake across the UAE continues on an upward trajectory. By 2023 year-end, the share of used EVs traded in the market increased by around 250%, with consumers increasingly considering environmental factors along with new technology adoption in their purchasing decisions.
2024 outlook
AlgoDriven forecasts average depreciation of around 15%+ for the upcoming calendar year. AlgoDriven predicted that prices will not fall further to pre-Covid levels, as the UAE’s automotive industry looks set to benefit from surging immigration and the country’s image as a thriving digital business and financial hub.
However, the Cars24 regional chief sees an increase, especially around luxury models. “We are anticipating a spike for the first few months of the year due to demand followed by an eventual plateau in the rates,” said Gupta.
