Desperate owners, banks and even the police try to unload more vehicles every week at auctions, and smart buyers are benefiting.
Bargain hunters look for a deal on wheels
DUBAI // A Jaguar, a Hummer and a Ford Mustang, each with gleaming bodywork and an immaculate interior, join the line-up of cars tempting would-be buyers looking for something special. These luxurious vehicles are being sold at auction, going under the hammer in the fallout from the economic downturn.
Some are being sold by desperate owners unable to keep up the repayments or in dire need of cash as they leave the country after losing their jobs. Others are offered by banks and finance companies hoping to recoup money after repossessing the cars, or by police who impounded vehicles that were never claimed. The number of cars offered at auction has doubled in the past year, according to people who attend the sales regularly, and they often sell for rock-bottom prices.
Although prices tend to rise the week before Eid, that did not deter about 300 people who turned up on Wednesday night at the Golden Bell auction house, based at the used-car market in Ras Al Khor. Potential buyers combed the lot looking to snap up a bargain. They milled around the 110 vehicles, kicking tyres, revving engines and prodding the upholstery. While the sport cars attracted much interest, Dana Shaheen had set her sights on a more modest purchase. She passed her driving test less than two weeks earlier.
"I'm looking for my first car," she said. "I want something like a nice sedan; something that it doesn't matter if I crash it." However, her move for a smart little silver Honda with more than 80,000km on the clock failed, as it was sold for Dh41,000 (US$11,160), about Dh9,000 more than she was prepared to pay. The fast-talking auctioneer, switching between Arabic and English, moved quickly on to the next lot.
The auction process is simple. Buyers put down a Dh3,000 refundable deposit in exchange for a bidding paddle, which has a number written in Arabic and English, and all accounts must be settled within 48 hours of purchase. The glut of discounted cars has not gone unnoticed; the turnout at the weekly auction has grown noticeably. "A year ago you would only have had about half as many people here - and it would only be men. Now, couples come down here and even bring their children," said Mohammed Hamdi, 30.
Originally from Egypt, he works in public relations for Shell and has been visiting the auction regularly over the last two years. "It is a way to make a bit of extra money," he said. "I can come down here and see if there are some good deals and if there is something I like for the right price, I will buy it. "I might drive it for a bit or just sell it. It's no trouble to just put an advert in a newspaper or on Dubizzle (a classified advertising website).
"The majority of people here are car dealers. They come here and pick up extra stock for low prices to fill up their showrooms. "But people are learning it is much cheaper to buy here than go to the used-car showrooms." Praveen George, 28, also a regular at the auction, said shrewd buyers could usually save up to 25 per cent by buying at the auction, but the week before Eid was an exception. "At the start of Ramadan everything was really cheap," he said. "In the first week this place was empty but now it is very busy and the prices have gone up.
"Now it's the final week before Eid so everyone is buying Eid presents. Everything is about 20 per cent more expensive. There are not that many bargains here today." Parish al Falasi, who owns the Al Falasi Motors Showroom in Dubai, picked probably the bargain of the evening. He scooped up a 2007 electric blue Ford Mustang, with white stripe running the length of the car, for Dh55,000. Similar models are being offered on Dubizzle for around Dh80,000.
The dealer said he was delighted with his purchase and hoped to buy three more cars. Like the majority of the prestige cars at auction, the Mustang was being sold by a high-street bank. Standard Chartered, HSBC, Citibank, Mashreq and Osool also sell through the auction house. "[The increase in cars] started about six months ago," said Cyriel Varwisk, 41, a marketing consultant who has lived in the UAE for 16 years and has come to the auction for the last five years.
"The number of cars available went from around 50 or 60 to more than a hundred and then more people started arriving." A Toyota RAV4 2007 model was sold for Dh68,500, the same price buyers might expect to pay on Dubizzle. After an unsuccessful attempt to buy it, Dana, 21, decided to call it a night. "I am a little disappointed," she said. "The prices were pretty high and I had hoped I would get something, but I still have lots of time.
"There are certainly lots of cars out there. I just have to find the right one for me." firstname.lastname@example.org