Owning a car in the UAE is a big decision since it involves many hefty expenses including fuel, insurance, parking
The application of VAT depends on whether you are buying from the agency or dealer or directly from an individual owner. If you are purchasing a brand new car from the agency, or a pre-owned car registered under the agency or dealer, then you'll have to pay 5% VAT on the car's value. The verdict is still out on how it will be applied, as it can either be 5% of the RSP (recommended selling price) or the actual invoiced amount (which could be discounted). On the other hand, buyers of used cars still registered
No VAT applies to car loan installments and the associated interest rates as of yet. Most banks have not changed their interest rates either, which means the banks will absorb any application of VAT for the time being. However, bank loan processing fees, usually in the range of Dh500-1,500 are subject to 5% VAT.
While the VAT does not apply to car
Dubai residents are now facing higher consumption costs because 5% VAT applies to petrol, diesel and other oil and gas products at the pump. Salik tags and recharge cards are exempt from
Car maintenance has become more expensive as 5% VAT is also applicable on periodic servicing, including oil change,
We have yet to see how VAT will affect sales of cars as well as other products and services in the coming months, but it is likely that there will be a decline in the number of sales. However, since many companies are currently offering discounts and promotions, you can still find plenty of good deals