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According to stats provided by the Roads and Transport Authority, Dubai has 540 cars per 1,000 people. It is the highest in the region and one of the highest in the world.

Whether you’ve recently landed in Dubai, or are long time resident feeling the pain of rising costs, we compare the advantages of owning a car, renting or using car services like RTA taxis, Uber or Careem.

Many people believe that owning, rather than renting, gives a sense of security that appeals to the our psyche, and this is as true of cars. But is it financially smarter to own a car in the UAE?

These results were determined by assuming daily commutes come down to an average of two 30 km trips a day, 6 days a week, so hitting an average of 20,000 kms a year with half of them crossing a Salik gate.

Option 1: Buying a car

Most commonly driven UAE car is the Toyota Corolla. We will use the Corolla as the example for this case:

Total cost: Dh70,900

20 per cent down payment: Dh14,180

Monthly payment: Approximately Dh980 for a 5 year payback plan

Extra car costs:

Dh3,000 to Dh4,000 for comprehensive insurance

Dh1,000 in registration related costs such as the annual inspection fees

Dh1,000 for cleaning, service, and maintenance costs

Dh4,000 to Dh5,000 in Salik and fuel costs assuming the current per liter

Make sure you add parking costs, if this is something you have to do.

Total yearly cost: Dh20,800 (excluding the downpayment)

Benefits of buying a car

1. Paying less over the long term. Monthly rent payments are generally more expensive than monthly car loan payments. But then once you are done with the payments, you are officially driving a car for years after your pay for it. The longer you drive it, the less it costs.

2. You have the option to sell it. As a car owner, if you are ever stuck financially and you need to trade it in or sell it, you can do so at any time.

3. No restrictions on appearance. If you want to use a car without having to keep it in perfect condition, then it is better to buy. When you rent a car everything has to be maintained perfectly, or else you are charged for damage.

4. Discount the depreciation if you buy a used car. Depending on the vehicle, 20% to 40% of its depreciation can occur within the first few years. So when you buy a 2- to 3-year-old-vehicle, you get the advantage of paying a price that reflects a substantial depreciation discount.

Option 2: Renting a car

Renting a car has less complicated costs primarily because registration, service and maintenance costs are taken care of. We used a basic economy sedan for this case.

Monthly payment: Dh2,000-Dh3,000 due to seasonal peaks and slumps and most agencies provide discounts on longer term commitments

Extra costs: Dh4,000-5,000 in Salik and fuel costs which are similar to that of owning a car.

Make sure you add parking costs, if this is something you have to do.

Total yearly cost: Dh40,500

Benefits of renting a car

1. No Depreciation Losses. A big advantage of using a rental car compared to owning one’s own car is there are no depreciation losses when renting a car.

2. No Extra Insurance is Required. If the person renting a vehicle already has auto insurance, most policies will extend an equivalent coverage to the rental car without any additional fees.

3. No Commitment. Anytime you want to leave the country, travel for the summer, or notice that you have a month where you don’t need to commute, you can easily save Dh2,000 to Dh3,000 by just stopping the rental

4. Change your car model. If you can afford to switch it up every month, you can try out different car models. That way you will never get bored with what you drive.

Option 3: Hailing a car

You own no car and you want to get around the city. Chauffeured rides are the simplest in terms of cost calculations and risk factors such as fines or accidents.

Let’s assume you hail a cab or order a car for Dh40 to Dh50 one way, which makes your return trip approximately Dh100 a day, five days a week.

Monthly Payment: Dh2,500

Extra car costs: Dh0

Benefits of hailing a car

1. Being chaufered around. A big perk is being chauffeured around without the headache of driving yourself.

and there is certainly some economic value in clearing those extra emails or expanding your horizons in the latest book you grabbed. You also never have to pay for parking or deal with service or parts being repaired.

Total yearly cost: Dh24,000

What is the best course of action?

Over the course of the year, it would seem owning a car is the right financial choice. However, for the economics to play out well, it’s important to keep these key cost drivers in mind:

It is recommended to buy used car as a new car has a much steeper depreciation in the first year, which is the largest cost associated with owning a car

The car must be in good condition to avoid unanticipated repairs which could turn out to be costly

The timeframe needs to be close to a year or more. Should you only need a car for a few months, owning becomes costlier.

Tip: The two critical cost advantages of owning a car: it needs to be a used car, so that the big initial depreciation can be avoided, and it needs to be in good condition.

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$2 min deposit casino

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2 dollar deposit casino

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Online casino deposit 5 minimum

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Online casino 5 dollar minimum deposit

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Minimum deposit 5 dollar casino

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