Are you on the hunt for a second-hand vehicle in Dubai? Unsure about the steps involved in securing financing for a pre-owned car and finalizing a transaction with an individual seller? Let’s walk through the process. Firstly, ensure you have the necessary personal documents:
- Proof of residency in the UAE;
- Emirates ID;
- Active bank account in the UAE; and
- Valid UAE driver’s license.
How to Apply for a Pre-Owned Car Loan
At Emiratescarloans.com, we streamline the process of searching, comparing, and applying for pre-owned car loans. Generally, banks have more flexible requirements for vehicle financing compared to other loans due to the asset’s collateral nature (i.e., the car itself). Alongside the mentioned personal documents, you’ll need to provide a salary certificate from your employer. If applying to a different bank, a three-month bank statement is also required. Once all documents are submitted and approved by the credit department, you’ll proceed to obtain a certified vehicle evaluation.
Securing a Certified Vehicle Evaluation
A certified vehicle evaluation ensures the agreed-upon price aligns with the vehicle’s market value. Banks typically provide a list of approved evaluators, often including the vehicle make’s dealership. The evaluator assesses the vehicle and issues an official document certifying its value, which must be submitted to the bank.
Submission of Vehicle Evaluation
After submitting the vehicle evaluation, your designated loan officer will inform you of the required down payment, typically set at 20%. For instance, for a vehicle valued at AED 100,000, the down payment would be AED 20,000, with the bank financing the remaining AED 80,000.
Bank Issues a Local Purchase Order (LPO) to the Seller
The bank issues an LPO for the car, guaranteeing payment of 80% of its value to the seller, with the buyer settling the remaining 20%. Subsequently, both parties proceed to the Roads and Transport Authority (RTA) for the vehicle registration transfer.
RTA Registration Process
The final step involves visiting the RTA with the seller to transfer the car’s registration to the bank’s name. Auto insurance documents are required, and a vehicle inspection is conducted. It’s advisable to agree with the seller in advance on who will cover the inspection costs. Upon passing inspection, the RTA registers the vehicle under the bank’s ownership. You’ll then furnish this registration card to the bank for their records. Notably, some third-party vehicle testing centers now offer RTA services, potentially saving you time at official RTA centers.
Upon completion, you assume ownership of the vehicle, though the bank retains ownership until the car loan is repaid.
