As the market for used cars continues to grow in the UAE one car dealership has launched the biggest pre-owned sales business in the Emirates.
Surefire way to steer clear of lemons
Buying a used car can be a tricky business.
That recently waxed vehicle with one careful owner might seem well looked after, but a buyer can never be sure if the mileage is right, the brakes will work or that it has not had any major scrapes.
In a bid to solve this common dilemma, a leading dealership has launched the largest used car showroom in the UAE, with each vehicle given a manufacturer's certification of roadworthiness.
Arabian Automobiles is the country's exclusive retailer of Nissans and Renaults, and yesterday it made its first major foray into the used car market.
Having enjoyed sales growth of 40 per cent among used cars on its forecourts last year, the company has opened the largest showroom in the UAE dedicated to second-hand vehicles.
It now aims to "professionalise" the market by initiating a Nissan-led programme to certify used cars as roadworthy, said Michel Ayat, its chief executive.
Speaking at the opening of the facility, Mr Ayat said the pre-owned car market was becoming "very lucrative" as an increasing number of consumers opted for second-hand models in the continuing economic recovery.
"We have realised that the market is not marginal, it's now one of our core businesses," Mr Ayat said.
Arabian Automobiles's Dubai showroom houses 350 cars, with each subjected to Nissan's certified pre-owned programme.
Any used Nissan or Renault that is brought into the showroom will have to prove three criteria to be eligible for the scheme.
The vehicle must be less than five years old, with less than 80,000km on the clock and no major damage to its chassis.
If these boxes are ticked, the car will undergo a further service of 145 check points and be given a complete reconditioning, including the tyres and brakes.
Each car will come with a one-year warranty, roadside assistance and complimentary oil changes.
The surety of the used car will come at a cost, as Arabian Automobiles will add a slight premium to the price offered by small independent used car dealers who do not hold the Nissan guarantee. "A good used car is more expensive than a bad used car," Mr Ayat said. "But you're getting a guaranteed level of quality, aftercare and financing facilities."
With sales of new cars falling after the financial crisis, there has been growing demand for used cars. Sales growth in the segment has far outstripped that of new cars since the market bottomed out in 2009.
New car sales for Arabian Automobiles in the first two months of this year are up 17 per cent, Mr Ayat said, while those for used cars have increased 40 per cent.
The company recently conducted a review of the overall UAE market and found that just 25 per cent of the 650 used car dealers were professional garages affiliated to a major manufacturer. The majority of the dealerships were small independent sellers.
"Few of the leading companies have given this [the used car market] their attention," Mr Ayat said. "The UAE is still behind the international market level."
The company's research found that used car sales make up a greater proportion of total sales globally.
For every new car sold in the UK there are two used cars sold, while in Europe the ratio is three used to two new. In the US, it is one to one.
Mr Ayat said that in the UAE two new cars were sold for every one used car, while he estimated that in the next five years the ratio would become one for one.