Used Car Insurance in the UAE – A Guide

The used car market is huge in the UAE. It is common knowledge that the UAE is not a cheap place to live in. Many families opt for used cars to meet the damned of a family vehicle while keeping things within budget.

But how does this translate into car insurance? What factors determine the premium for used car insurance? Is it worth buying a used car, or should you save for a better option?

We’ll discuss this and much more in our blog today.

Benefits of Buying Used Cars

There are many reasons why buying a used car is beneficial:

1. Cheaper – As we mentioned before used cars are a cheaper option compared to brand new cars fresh off the assembly line. They are budget-friendly and can stretch a small savings account.
2. Practice Run – Many residents in the UAE are ex-pats. Some come from countries where they drive on the left side of the road. Therefore, it is wiser to buy a used car until you get the hang of driving in the UAE.
3. Minimum Risk – With a used car you can expect a minimum risk of great damage. It won’t be as costly to repair a brand new car. This fact can shave a lot off your premium. Used cars are also less likely to get vandalized. Minimum risk is also helpful when buying used car insurance.
4. Second Car – If you’re a big household you’ll require two vehicles. But not everyone can afford two. So used cars are a great second car option. While the brand new car can be used for longer trips, the used car is great for school runs, and managing tight inner-city streets.

Types of Insurance for Used Cars in the UAE

There are two main types of used car insurance in the UAE:

Comprehensive Car Insurance

As the name suggests, comprehensive car insurance provides wider coverage than other types. Comprehensive car insurance covers accidental damages, either by you or any third party. It will also cover theft, vandalism, or fire damage.

Third-Party Liability

Unlike comprehensive insurance, third-party insurance only covers the damages caused to a third party by you. This policy won’t cover your car’s damages due to your fault.

In case your car gets damaged due to someone else’s fault, you will have to determine if the other party has third-party insurance to cover the damages to your car.

Common Problems With Used Cars

If there are benefits, you can bet there will be problems with used cars. The most common problem is you’re not entirely sure what you’ll get. There are no guarantees with a used car. Here are some of the most common problems you should look out for when buying a used car.

1. Repainted Panels – Repainted panels are an indicator that there has been damage that was repaired. Unfortunately, you can’t really tell repainted panels with the naked eye. There are certified paint meters that can assess the difference by measuring paint density.
2. Dented Rims – Dented rims are easy to spot. However, they don’t always determine how bad the damage is. Damaged rims can seriously affect the alignment of your car. To get an idea of how bad the damage is you should take the car on a long test drive. These can have a major impact on your used car insurance.
3. Brake Pads – Worn out brake pads can be a moderate to a serious problem. Let us explain. In most instances, worn-out brake pads aren’t serious problems, but if the pads stop functioning properly it can cause trouble when you’re driving. It is also an expense you’ll have to bear if you find out about them after you purchase a car.
4. Battery Damage – Battery damage is something you should look out for. If it is still under the manufacturer’s warranty you’d be advised to get damaged batteries replaced from the manufacturer. This can be an expensive undertaking. Replacements can cost around AED 2500 and effect your used car insurance.
5. Engine/Transmission Leak – This is one of the worst damages. It is hard to determine where the leak is. Repairmen will have to disassemble the engine or transmission. This takes time, energy, and can cost a hefty amount.

Used Car Insurance – The Details

It is a common misconception that used car owners are charged a lower car insurance premium. This isn’t always true. Your car isn’t the only factor that determines your premium.

Your Choice of Used Car Insurance

If you purchase an expensive policy, your premium will be higher despite your second-hand car. Third-party liability insurance is a cheaper option. But if you want to mitigate the risks of buying a used car with Comprehensive coverage, you can expect a rise in car insurance premiums. Incidentally, Comprehensive coverage is usually 10% over and above the value of your car. This can mean a lot, especially when trying to save on premiums.

Other Variables

When determining the value and risk of your used car, insurance providers look at a list of factors:

1. Vehicle history – Whether the car has been through any accidents and the seriousness of the damage. It will also look at the repairs done after.
2. Availability of parts -It is important to be sure that parts are easily available in the market for your car. Used cars tend to need more maintenance and replacement parts. Used car insurance providers will need to see if the parts are available easily.
3. Safety score – Saftey scores are very important. If your car scores high on the safety score you can be awarded a lower used car insurance premium. However, if the score is too low the company might not cover you at all.
4. Theft rate – Another misconception is that old car rarely get stolen. Thieves find old cars easier to disassemble and sell for parts.

Antiques and Used Car Insurance

Antiques, on the other hand, are considered luxury items. They are costly to insure. Their parts aren’t easily available and are mostly used as collector’s items. You can’t expect cheap used car insurance for antiques.

Compare

The best way to get cheap used car insurance is to shop around. Conduct online used car insurance comparison to get access to competitive quotes. You can get better deals and more efficient policies when you compare online.

Can Car Insurance for Used Cars Be Transferred:

Yes. You can transfer the car insurance to new car owners provided that the car registration copy for the new owner is available.

Transferring the car insurance is simple as it requires only a few documents, including the new RC, Endorsement form, car inspection, and premium payment.

How to Get Existing Used Car Insurance Transferred:

You will need the following documents to transfer the insurance policy from one owner to another:

• Original Policy Copy
• Certificate of Insurance (Form 51)
• Notice of transfer of ownership of a motor vehicle (Form 29)
• Application for initiation and transfer of ownership of a motor vehicle (Form 30)
• Photocopy of registration certificate book with the name of the new owner

FAQ’s

How long do you have to get insurance after buying a used car?

You have to get car insurance immediately after buying the used car. However, If you already have insurance, you can add the used car to your policy, though you generally have a week to a month to do so after buying it, depending on the car insurer.

Do I need insurance before I buy a used car?

Yes, you need to buy a car insurance for the used car. It is compulsory by the UAE government to get at least third-party car insurance before putting your car on the roads of the UAE.

How expensive is car insurance in UAE?

You will have to pay 1.25%-3% of your car’s original value as your car insurance in the UAE.

Which car is best for second-hand in UAE?

Following are a few car suggestions that are best for second-hand use in the UAE:

• Toyota Corolla
• Nissan Altima
• Toyota Land Cruiser
• Toyota Yaris
• Ford Focus

Do second-hand cars need insurance?

Yes. Buying comprehensive insurance for a used car is a good idea.

What is third-party insurance for cars in the UAE?

Third-party insurance covers the damages caused to a third party by you. This policy won’t cover your car’s damages due to your fault.

Related Articles:

An Extensive Guide to Compare Car Insurance Prices in Dubai

A to Z Guide: Everything you need to know about driving a car in Dubai

Avoid These Top 10 Mistakes When Purchasing Car Insurance

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