The Best Time to Buy a Car in the UAE: Prices Are Dropping, Loan Terms Are Record-Breaking

In 2025, the UAE car market is experiencing a unique period. Prices for new and used cars have dropped to their lowest levels in the past five years. Banks are offering car loans with zero percent interest for 3–5 years, while dealers are additionally including insurance and extended service packages in the car price. The sharp price drop is due to vehicle batches initially intended for the U.S. being redirected to Gulf countries because of the 25% tariffs imposed there.

Chinese brands are actively increasing their market share: their presence has grown from 7–8% at the end of 2024 to 15% in the second quarter of 2025. Chinese manufacturers attract buyers not only with affordable prices but also with unprecedented warranties and preferential insurance terms for electric vehicles. This is forcing traditional brands to revise their pricing policies to remain competitive.

According to AutoData, the UAE car market grew by 13.8% in the first quarter of 2025, while the electric vehicle segment surged by 62.2%. Tesla remains the leader among EVs, followed by BYD and MG. Experts believe that the most favorable conditions for buyers in years have now formed, ranging from price reductions to unique offers with 0% financing and multi-tier insurance packages.

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