The used car market in the UAE is very much in its infancy but it is providing consumers with good deals and peace of mind.
Buying an approved used car is unrisky business
Buying a used car is a risk at the best of times. I know this because I've bought many, many cars over the years and not a single one has been brand new. I've had my fingers burnt on more than one occasion.
The 1988 Range Rover that returned an average fuel consumption of 36L/100km and shot flames out of its exhaust when going downhill was a particular low point, as was a Series III Jaguar XJ6 that smoked so much onlookers thought it had a two-stroke engine. But, in general, I've got away quite lightly and not regretted my decision to go for cars with a previous owner or five in the logbook.
Cars have been on sale for more than 100 years in my home country, so it's hardly surprising that the market is as much geared towards pre-owned vehicles as it is to new ones. The fact some cars can lose a huge chunk of their value as soon as they're driven away from the showroom has caused many to go for the nearly (rather than brand-spanking) new motor.
That way, someone else takes the initial financial hit and, even after a year or two, the car can still be as good to look at and to drive as new. But here in the UAE, things are a little different.
Here, the car market is still very much in its infancy - after all, there weren't a huge number of cars here until about three decades ago. As the populations of our cities have exploded and the skylines have grown higher, cars have come along to replace camels as the transport of choice. There's a very ingrained cultural difference here, too, inasmuch as the desire to own a brand-new car often comes before any fiscal prudence, which is obviously good news for manufacturers, dealers and financial institutions alike. Things are changing, though. The age of the approved used car is upon us.
There are a number of reasons for this. First of all, many consumers are exercising more restraint when it comes to large, expensive purchases as a result of the worldwide economic downturn. Secondly, UAE law stipulates that anyone financing a car, whether it be new or used, must stump up a deposit of 20 per cent of the asking price. And a fifth of the cost of a car that's lost perhaps half its value in two years is often very doable. Thirdly, most cars are incredibly reliable and efficient things these days, meaning they age rather well. And, last but not least, manufacturers have woken up to the fact that used or nearly new sales are big business and they understandably want a slice of the pie.
And that, for once, is excellent news for consumers.
"Approved Used" cars have been on sale for many years in Europe and America but, even then, not all manufacturers have been participating for very long.
Ferrari, for instance, has only in recent times started to sell warrantied used cars through its dealerships (they've started it here, too, this year), but high-volume companies such as Ford, Audi and many others have long been at it.
And, in the UAE, the first mass Japanese brand to really get its act together has been Nissan, with its "Nissan Certified Pre-Owned" scheme - represented by Arabian Automobiles in Dubai and the northern Emirates.
So rather than simply go through statistics over the telephone, I decided to pay them a visit to see just what is going on and what it means for buyers here.
I meet up with Mahesh Rohra, general manager for the pre-owned side of things, and he's evidently quite passionate about what his company is doing.
"We were selling used cars for a while here," he says, "but last November we started with Nissan Certified Pre-Owned and we were the first Japanese company to do this. What happens is that we follow set guidelines from Nissan, in terms of the maximum age of the car, its maximum allowable mileage. We inspect for any accident damage and, if there is any chassis damage, we simply reject the car. Once we have established these things, there are two sets of guidelines to go through before a car can become 'certified'.
"One of these sets is a 145-point inspection carried out at our dedicated preparation centre, where anything you can think of regarding the mechanical and electrical aspects of a car are checked."
Doing 145 checks is pretty impressive. Porsche, for instance, puts its approved used cars through a 111-point inspection, so Nissan's thorough approach is to be applauded.
"Only once a car has been through these rigorous tests and is reconditioned to a level that Nissan stipulates can it be sold under the certified scheme," adds Rohra.
And, once a car is deemed worthy, it's covered by a one year/25,000km warranty, which can be extended by a further year/25,000km if the customer desires.
"The warranty covers three complimentary oil services, 24-hour roadside assistance [according to the brochure they'll even rescue you if you run out of petrol], as well as a 20 per cent discount on any future servicing the owner may require."
Obviously this is a different experience to buying a used car from some backstreet sales lot. It's selling peace of mind and, in a country where the car is king, that's something worth having.
But, for manufacturers, these programmes offer something else that I hadn't until now thought about. They actually increase the residual values of their cars. "Since we started the scheme here last November, we've seen residual values increase by between five and 10 per cent," says Rohra. And this is something that should be music to the ears of anyone buying a brand-new car. It's a good thing whichever way you look at it.
I often lament the intrusion of computers on our lives but, when it comes to cars, we couldn't really do without them. A car's internal computing systems, when read, can tell an engineer an awful lot about the way it has been driven, whether it has been regularly serviced, even the centrifugal forces that have been acting upon it, which means they can tell if it has been thrashed for days on end on a racetrack.
It might be a bit Big Brother but, when you're spending a huge chunk of cash on a nearly new car, you really need to know what its history is - and that means delving into more than a fully stamped service record book.
And what about the initial savings when it comes to buying nearly new? Back to Rohra: "We have a 2009 model 350Z here, which, when it goes on sale, will be priced at less than Dh130,000. Brand new that would have been at least 190."
Yes, I know that the 350 has been superceded by the 370, but that's still a proper bargain.
A bona fide driver's car, unmolested by aftermarket tuners and fully warrantied for Dh60,000 less than it was just a couple of years ago - it's a tempting proposition, especially if you're in the market for Nissan's GT-R, one of the most complex performance cars on the road today.
And, with that, I'm whisked from the Sheikh Zayed Road showroom, out the back and across another road. Here is the largest car sales lot in Dubai, with enough room for 300 vehicles. All the cars are shaded under large canopies and all are grouped together according to what models they are.
It's an impressive sight and all vehicles for sale under the Nissan Certified Pre-Owned scheme are fixed with plates saying as such, meaning they've all been passed under that tough 145-point inspection. In many respects, they're as good as new.
It's catching on, too, because other companies such as Toyota, Honda and Mitsubishi have now rolled out similar programmes and the big German companies have been there for some time, although they're now being more aggressive in their marketing.
But if you're still wondering if this is a big con for the manufacturers to make even more money, consider the case of a Nissan Altima that had been part-exchanged with Arabian Automobiles. "It was an extremely clean car and, upon initial inspection of the service record, there was nothing to suggest it had been subject to any damage," recalls Rohra. "But when it was put through the 145-point check we discovered that both airbags had previously been deployed and it quickly became apparent that it had been in a serious smash and had been quite expertly repaired. The car was rejected and a lesson learnt."
This is, for me, the main selling point for this kind of service. I'm not an expert at car inspections and, chances are, neither are you. So the fact that you can rely on the experts having done it for you, only releasing a car for sale if it's of a very high standard, is a source of comfort. Peace of mind cannot be overestimated, after all. The days of me buying flame-spitting Range Rovers are well and truly over.