Are you in the market for a used car in Dubai? Are you wondering what the procedure is to obtain a used auto loan and complete a purchase from another individual? To start off, you need to have the following personal documents:
- UAE resident;
- Emirates ID;
- UAE bank account; and
- UAE driver’s license.
Applying for a Used Car Loan
bayzat makes it easy to search, compare and apply for used car loans. In general, banks have less strict requirements for vehicle financing as compared to other loans because the debt is secured by an asset (i.e. the car itself). In addition to the personal documents mentioned above, you will need to submit a salary certificate from your employer. If you are applying to a bank that is not your regular bank, you will also need to supply them with a 3 month bank statement. After submitting all the documents to the bank and being approved by the credit department, you must then get a certified vehicle appraisal.
Obtaining A Certified Vehicle Appraisal
The certified vehicle appraisal is a measure taken by the bank to ensure that the agreed price of the used vehicle is not well above its market value. To obtain this appraisal, the bank will provide a list of approved appraisers. This will typically include the dealership of the vehicle make (for example Al Nabooda Used Car Dealership for Audi). The appraiser will examine the vehicle and will then provide an official document which states the vehicle’s value. This document must be submitted to the bank as a supporting document.
Submitting the Vehicle Appraisal
Once the vehicle appraisal has been submitted to the bank, the loan officer assigned to your case will then let you know how much you will need to pay as a down payment. Typically, the down payment must be 20%. So for a vehicle valued at AED 100,000, the down payment must be AED 20,000 and the bank will finance the remaining AED 80,000.
Bank Issues an LPO to the Seller
The bank will then issue a local purchase order for the car, which is given to the seller. This document basically means that the bank guarantees payment of 80% of the value of the car to the seller and the buyer must settle the remaining 20%. After this, the buyer and seller must go to the RTA to transfer the registration of the vehicle.
The final step is to go to the RTA with the seller to register the car in the bank’s name. You will need your auto insurance documents and must also do an inspection of the vehicle. You should always agree with the seller beforehand which party will bear the cost of the inspection. Upon passing the inspection, the RTA will register the vehicle in the bank’s name and you must then take this registration card to the bank for them to make a copy for their records. Recently, some third party vehicle testing centers have begun to offer RTA services such as vehicle inspection and registration; this could help you avoid the long lines at the official RTA centers.
Once this step is done, you are now the proud owner of the car, although technically the bank owns the car until you pay off the car loan.