Car Financing In The UAE: What Every Buyer Should Know

Buying a car is one of the biggest financial decisions most people make in the UAE. Yet, while car financing is designed to make that purchase easier, it often feels limited, outdated, or unnecessarily complex.

Globally, car financing isn’t just about spreading payments but also about unlocking choice, affordability, and flexibility. In the UAE, however, buyers still face fewer options compared to markets like the UK or the US. This gap doesn’t just affect dealerships; it directly impacts consumers’ wallets, ownership experience, and ability to choose the right car.

This guide unpacks the current state of car finance in the UAE, the challenges buyers face, and how smarter finance products can actually work for you.

How Car Financing Works In Other Markets

In mature automotive markets, financing is central to how people buy cars.

• In the UK, up to 90% of buyers use finance instead of paying cash.
• Finance contributes around 33% of dealership profits, meaning dealers prioritise flexible and innovative finance packages.
• Buyers choose from options like leasing, personal contract purchase (PCP), balloon payments, and buyback schemes, tailored to different lifestyles and budgets.

The result? Consumers in these markets enjoy greater flexibility, better access to higher-spec cars, and a more predictable ownership experience.

The Reality In The UAE

The picture looks very different here.

• Only about 50–60% of buyers finance their cars. Nearly half still pay cash.
• Finance contributes just 2–3% of dealer profits, so dealers don’t prioritise offering variety.
• Most plans are limited to five-year loans with a 20% down payment: a “one-size-fits-all” model.

This means fewer options for you, the buyer. For many, that translates into higher upfront costs, less flexibility, and missed opportunities to drive safer, better-equipped cars.

In the latest episode of the AutoTalk Podcast, DubiCars’ CEO Craig Stevens said, “It does feel like finance in the UAE is still not where it needs to be from a consumer perspective, and if someone can get it right, it would unlock huge opportunities for this marketplace.” Watch the full AutoTalk episode here:

The Main Challenges Consumers Face

1. Limited Finance Products
   Instead of a menu of choices, buyers in the UAE often face a binary decision: cash or a loan of up to 5 years. That excludes leasing, balloon structures, or buyback models that might better suit short-term residents or families on a budget.
2. Dealer Dependency on Banks
   Most dealers simply forward finance applications to banks. This slows approvals, adds friction, and leaves buyers waiting for days, sometimes weeks, for their car.
3. Slow Reimbursements
   During peak buying times like weekends and holidays, delays in bank disbursement can make the process frustratingly slow. This is the period when many buyers are ready to commit, but approvals lag behind.
4. No Bundling of Extras
   Globally, finance often includes extended warranty, service contracts, GAP insurance, paint protection, and accessories in the monthly payment. In the UAE, these are usually separate, meaning big upfront payments which are a turn-off for buyers.
5. High Upfront Costs
   The mandatory 20% down payment is manageable for long-term residents, but for newcomers juggling rent, school fees, and relocation expenses, it’s a heavy burden.

Glenn Harwood, Co-Founder of AlgoDriven said on the AutoTalk Podcast, “Most people can pay the 20% on their credit card, but if you’re new in Dubai, it might slow you down a little bit.”

How Consumer Preferences Are Shifting

Despite these challenges, the way people buy cars in the UAE is evolving.

• Monthly focus: Buyers increasingly shop by monthly installment affordability, not the overall car price.
• Longer loan terms abroad: In some markets, up to 22% of buyers take 84-month loans, spreading payments even further. The UAE still caps repayment periods at 60 months.
• Younger buyers are finance-friendly: Those aged 18–34, who are used to subscriptions, are more open to financing if it’s quick and digital.
• Digital interest: Online finance calculators (like DubiCars’ tool) are popular, but fragmented bank processes still cause friction.

Instead of surfacing cars based on their retail price, DubiCars’ finance tool showcases cars that are available on finance while also displaying the monthly payment amounts instead of the car price. Users can also sort results by highest or lowest monthly payment. 

The best bit? Users can search for cars based on their monthly payment budget. DubiCars’ data reveals that the number of users using this tool has grown by approximately 5% month-on-month on average, in just the last year alone. This reveals an increasing number of users looking at finance options.

Why Smarter Finance Benefits Both Consumers & Dealers

When done right, car financing isn’t about debt, it’s about smarter money management. Here’s how:

• Lower upfront stress: Flexible down payments ease the initial burden.
• Predictable costs: Bundling service, warranty, and insurance makes ownership smoother.
• Safer cars within reach: Spreading payments can make higher trims with safety tech affordable.
• Flexibility for expats: Balloon payments, PCP, or leasing let you upgrade or exit easily.
• Faster approvals: Streamlined digital processes mean less waiting, more driving.

Buyers’ Checklist For Smarter Car Purchase

Heading to the showroom to buy a car on finance? When you’re at the showroom, ask for:

1. Three options: Standard loan, balloon/PCP-style, and leasing/buy-back.
2. Bundled payments: Request warranty, service, and GAP insurance in your monthly plan.
3. True APR: Compare reducing-balance/APR equivalents, not just flat rates.
4. Exit options: Check early settlement, trade-in guarantees, and balloon terms.
5. Digital support: Push for e-signatures, instant approvals, and transparent tools.

The Bottom Line

Car financing in the UAE is at a crossroads. While markets like the UK and US offer abundant options, the UAE still lags with limited models and heavy upfront costs. But as more consumers demand flexibility and transparency, and as dealers and banks modernise their offerings, the landscape is changing.

For buyers, the opportunity is simple: ask more, demand better, and use financing as a tool to get the car you want, without compromising your financial comfort. Smarter finance isn’t just about making cars affordable. It’s about making ownership simpler, safer, and more predictable for you. Want to explore cars based on monthly payments instead of price tags? Check out DubiCars’ finance search tool and see what fits your budget today.

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Buying a car is one of the biggest financial decisions most people make in the UAE. Yet, while car financing is designed to make that purchase easier, it often feels limited, outdated, or unnecessarily complex. Globally, car financing isn’t just