Affordability and carefree-motoring steer expatriates away from car showrooms and into the temporary world of rental firms.
Drivers are finding it pays to lease rather than buy
If it wasn't for surfing, Helen Carter would probably still be hailing down taxis to get around Dubai. But such is her passion for riding the waves, the thirtysomething Briton realised that without her own set of wheels she could never fully commit to the water sport. "I was learning to surf last year and needed a car that could fit a nine-and-a-half-foot long board in," she says. "Taxi drivers wouldn't have been too thrilled every time I called them up to take me to the beach - there is no way I could have squeezed my board in."
Determined to master the waves, the art director for a Dubai-based publishing firm hired a 4x4 from Yasi, a car-leasing company, in August of last year. She had never before looked into leasing since moving to the UAE in 2007, but knew from friends and internet searches that there were several operators to choose from. Finding the cheapest deal, however, was less easy. With so many firms offering rental services, Ms Carter was unsure whether to go with a global brand, such as Hertz or Budget, or take a chance on a lesser-known local outfit. After making several enquiries with local firms, she eventually chose Yasi due to its close proximity to her workplace in Garhoud.
Ms Carter pays Dh2,500 per month just for the car and insurance, with Dubai road toll charges and any parking or speeding fines during the same period adding an extra Dh500 on average to her bill. There is no corporate deal available through her company, so she pays the same as any other customer. But signing up for a year's lease has knocked about Dh200 to Dh300 a year off her total bill and removed any hassles associated with buying a car.
"I didn't want to buy here because with the bank loan and everything else it's an extra tie," she says. "You have your rental agreement, which usually ties you in for a year with penalties [if you break any conditions], then you have your bank loan tied in with more penalties for early repayment, so I didn't want to buy because I didn't want an extra financial chain round my neck." Many expatriates tend to rent a car as the costs and associated commitments of buying one far outweigh the convenience of a lease agreement.
Leo Seaton, a British expatriate, chose to hire a car while living in Abu Dhabi because buying would have required securing a bank loan. "In the beginning, having just started a new job and living abroad for the first time, I wasn't sure how long I'd be in the UAE, so renting a car on a rolling month-to-month basis gave me flexibility," the former PR manager for a UAE-based airline says. "I also didn't fancy the inevitable UAE bureaucracy involved with buying a new car, such as securing the relevant documentation and insurance."
Instead, Mr Seaton leased from Thrifty on a six-month corporate deal arranged through his employer. He paid Dh2,950 per month for a Ford Mondeo, which was replaced with a Chevrolet Epica when his girlfriend was involved in a minor scrape involving another vehicle. A car owner involved in a similar incident would have to make do without their vehicle for several days or weeks, depending on the damage, while it was being repaired. But Mr Seaton was given a replacement vehicle the same day as his girlfriend's collision, much to his satisfaction. "The hire company sorted this [a replacement vehicle] out very quickly and efficiently. I was even given the mobile number of one of the firm's employees, which was impressive," he says.
Mr Seaton has recently relocated to Australia after more than two-and-a-half years in Abu Dhabi. During his time in the capital, he always rented and never once considered buying even though the amount spent on hiring probably surpassed the likely cost of purchasing his own vehicle. "It was the most convenient thing to do as a quick and easy solution to my transport needs for getting to and from work," he says. "I would have had the hassle of re-selling the car when I left the UAE, at a time when the re-sale market for cars was not fantastic and there would have been more bureaucracy, too [such as re-registering the car under the new owner's name]."
Returning the hire car was a simple task with no problems, according to Mr Seaton. "I was impressed with how easy it was to return the car at the end of the contract, and the fact that the company honoured its promise to refund the outstanding balance on the contract into my account, even after I'd left the country," he says. Renting may be more convenient than buying, but what about the cost? For Ms Carter, paying more for a vehicle big enough to carry her surfboard was a necessity. But those willing to lease smaller cars can find cheaper rates if they shop around. Thrifty Car Rental offers a 1.3-litre Toyota Yaris or Mitsubishi Lancer for Dh2,100 on a monthly basis. An extra Dh350 is charged for full comprehensive insurance, while Dh5 is added to the bill each time the driver passes through Dubai's road tolls. In addition, a six-month lease for a Lancer sedan or Yaris hatchback is available at Dh1,700 per month, including insurance.
A quick search on Discount Rent A Cars' website reveals a Dh29 daily rate for a Chevrolet Spark 800cc, although the fee rises to Dh45 when adding insurance. In total, the bill comes to Dh1,415 per month or Dh1,290 with third-party insurance when leasing on a yearly basis. Meanwhile, Budget's cheapest option is Dh1,800 for a fully insured 1.6-litre Yaris or Chevrolet Aveo. The rate remains the same, regardless of whether you hire on a monthly or half-yearly basis. A two-year option for Dh1,300 to Dh1,400 per month is available, but only to companies that require hire cars for their employees. The best offer at Diamond Lease is Dh1,695 and Dh1,585 respectively for an automatic or manual 1.3-litre Lancer.
Before signing up with any lease company, it's advisable to check whether it has travel distance caps like Hertz. The car hire operator recently scrapped unlimited mileage contracts after a surge in customers using its vehicles to commute between Dubai and Abu Dhabi. Any driver travelling more than 5,000km each month now faces an additional fee. The penalty applies to Hertz customers who rent on a monthly basis.
Getting details for such charges and finding the cheapest deals requires phoning car-hire companies and ignoring their websites, which rarely display the best prices, according to Peter Fancy. The 45-year-old British expatriate moved to Dubai in August to work as a business development manager for an Abu Dhabi-based services company. Soon after touching down in the UAE, he spent some time sifting through car-leasing websites, but could only find short-term deals for tourists. "I checked out some of the big companies and on their websites the prices were fixed," he says. "You can book online, but there is no negotiating and you only get weekly rent options."
Unable to find a good monthly deal online, Mr Fancy sought advice from his colleagues and opted to lease a Nissan Pathfinder from Fast Rent A Car for Dh4,200 per month. He is considering buying at some point, but is content for now with the convenience of leasing. "If you're involved in an accident, you can go and get another car from your hire company tomorrow," he says. "I noticed recently that the mileage on the clock was 38,000km and knew my car needed a service at 36,000km, so I rang the company up, had some guy collect it and got a replacement straight away."
While keen to eventually get his own set of wheels, Mr Fancy can see why people prefer renting to buying. In particular, he believes job insecurity is a major factor for those who decide to lease. "I am in two minds over whether to buy or not because of the transient nature of the work here. The job market is more stable than it used to be, but an employer could pull the plug on you easier than in the western hemisphere."
The only issue Mr Fancy has faced is a fine he received after being snapped by a speed camera on Emirates Road between Dubai and Abu Dhabi. His bill for that particular month was considerably higher than usual, although he accepts liability for the additional fee. Still, he believes monitoring the speed dial is the surest way to keep costs down. "Just don't drive too quick," he urges. "Keep your foot off the pedal, take it easy and don't belt down the motorway as fast as possible."
Ms Carter has her own tip for keeping the monthly rate down. Living in Umm Suqeim, she used to take the beach road towards Satwa to avoid travelling through three road tolls along Sheikh Zayed Road when working in Garhoud. The journey took longer, but saved her Dh10 a day as she was only passing through one Salik Gate while driving over Garhoud Bridge to her offices, which have since moved to Media City.
"Even going to Dubai Mall, I'd end up going through two toll gates so I went the long way round to try to avoid it, which isn't so easy because the signposts here aren't great," she says. "But it can be a good way to save money when you know the route." email@example.com