Al Habtoor Motors is the latest major dealership to throw its hat into the used-car ring as prominent UAE family companies turn to the rapidly growing market.
Dealerships now have to offer a wider range of products and services to buyers as the market matures after the 2008 financial crisis and potential buyers look for better value amid tighter financing rules from the Central Bank.
Al Habtoor Motors has launched Car Zone, a concept that Karl Hamer, the managing director, describes as "a big Ikea for cars", where customers can choose from different brands and models that have undergone a 111-point check for roadworthiness.
The used-car market grew 45 per cent last year, said Mr Hamer.
"It's growing faster than anything. People are beginning to see the benefits of the price against a new car," he said.
A new boutique Car Zone is now open on Dubai's Sheikh Zayed Road, and Al Habtoor Motors plans to open a "megastore" in Dubai Investments Park in January to house 250 second-hand cars.
Each car will come with a warranty of up to five years, and customers will be able return vehicles to the store within 14 days if they are dissatisfied with their purchases.
Al Habtoor is the distributor of Mitsubishi, Bentley and Bugatti cars in the UAE, but the Car Zone will sell brands including Nissan, Ford, Toyota and Hyundai.
"It is a one-stop shopping experience like that more enjoyed in a retail store than a traditional garage," said Mr Hamer.
Examples of cars on offer are a 2010 Toyota Camry for Dh67,500 (US$18,240), a 2009 Mitsubishi Pajero for Dh67,900 and a 2008 Nissan Altima for Dh42,000.
All cars must be between six months and four years old to be sold under the scheme.
The dealer will also launch a website in the new year with pictures of the cars, financing quotes and a live chat-feed with sales representatives. Al Habtoor joins a growing number of major UAE dealerships this year launching used-car showrooms or schemes where pre-owned models are approved by the manufacturer.
Arabian Automobiles, which opened a showroom for Nissan, Renault and Infiniti cars in March, conducted a review of the overall UAE market and found that last year just a quarter of the 650 used-car dealers were professional garages affiliated to major manufacturers.
The majority of the dealerships were small independent sellers. This year though, all the major manufacturers have launched approved second-hand car schemes through their dealers.
The market for new cars is also developing as habits change and consumers buy fewer expensive vehicles.
Amid tighter financing rules introduced in May by the Central Bank, dealerships have been offering innovative financing options and part-exchange schemes that were not available in the past.
"The market is maturing, and it is a positive development," said Satish Singh, the chief executive of Tetrahedron Consulting, a company dedicated to the Middle East car market. "There is more choice for consumers, and if you are new to the country you can buy a used car while you are settling down."
Mr Hamer said sales for new cars had been strong for the year and that the Mitsubishi Pajero remained the best-selling car in the UAE.
"The Central Bank rules make dealers more structured," he said, "and come up with innovative ways to help customers buy a car."
