A Review and History of cars being imported from USA to UAE.

Finally, we are seeing change coming through pertaining to the import of vehicles. Over the last decade, UAE saw major increase in the import of vehicles from US and North America. Generally, cars in general “if clean title only” made for better used-car options compared to vehicles available locally. The major reason or this is the weather conditions in the exporting countries. Cooler temperatures and less harsh summers meant that the body of the car and the paint are in a better condition overall. The lack of desert / dust makes for cleaner car interiors and exteriors. Despite the high mileage on these cars, they are still a better alternative to second hand local cars.

Back in the day, a lot of older models of vehicles were being imported, with the Honda Civic leading, closely followed by the Toyota Corollas and Camrys. These were mostly “Clean Titiled Cars”. With passing time, the Hybrid cars started gaining popularity, and because of their non-availability in the UAE, it was not un-common to see them amongst the imports.
With growing local demand, many new ‘used-car businesses’ mushroomed and the business segment saw a boom in the buying and selling of vehicles. Customers from around the GCC (KSA, Oman, etc.,) as well as Middle East and Africa were seen buying cars from the UAE. One of the reasons for this huge interest was the huge variety of cars available for purchase, which included both common and top-end brands like Toyota, Lexus, Infinity, Nissan, Chevrolet, Gmc, and Mercedes. As there were no strict policies and import regulations governing this business segment, buyers and sellers both saw trade booming. They also saw benefit in trading in ‘salvage title’, ‘total loss / undrivable’ or ‘flood damaged’ cars gaining huge profit turnover. As a result, the end-user suffered, by buying cars that may not be as safe to drive as one would want, or be as durable as one would expect.

As we are focusing on the import policies of UAE, we will skip car testing and registration processes outside the UAE. Within the Emirates, car testing involves checking some major and minor parts of the car including, chasis, door rubbers, car joints, etc. The purpose of checking the body is to report if any repairs have been conducted on the car, which the user / buyer should be made aware of. In an ideal world, the seller should inform the buyer of such repairs. However, not all buyers are open to giving this information to customers, so it is always advisable to conduct a comprehensive evaluation of the vehicle before the purchase transaction. The comprehensive test costs AED 300. An additional AED 100 would also cover car computer testing, which will ensure all electronic aspects of the car are working properly. These tests equip the buyer with important information on the car, and helps them make an informed decision. Many sellers try to sweet talk the customer out of conducting these tests, promising that the cars are in excellent condition and they are never to be seen again when cash is exchanged, resulting in the buyer being stuck with a vehicle which cannot be registered due to it not passing the minimum requirements for a car to be road worthy.

Flood Damaged cars are another huge concern and can be regarded as the worst case of non-road worthy car purchases (believe me, this is worse than buying cars that have their chassis damaged!). After most natural disasters – floods, storms, hurricanes, many cars (which include many news cars too) are written off, which then are imported to the UAE. As these cars were submerged in seawater, it is no surprise that corrosion can be found in the electronics of the vehicle, which includes the wiring, fuse box, etc. Dealers get minimal repairs done to hide these damages, however, these cars soon break down due to usage, resulting in huge losses to the buyer. Unfortunately, many people fall victims to such tactics. And as these cars are fairly current models and the purchases most like are bank financed, and the buyer is stuck with a broken car, huge repair bills, bank installments and no resale value! In other words a disaster!

Due to stricter policies in the UAE, dealers starting exporting cars like Chevrolet Tahoe, GMC Yukon, Mercury, Ford Crown Victoria, etc., to KSA. The likes of Toyota Corolla, Toyota Camry, Tundra, Nissan Sunny, Nissan Tiida, etc., were being exported to Oman. Due to practically zero shipping charges (dealers buying the cars in the Emirates, repairing them, and driving them to KSA / Oman and selling them there) this soon became a very lucrative business.

In 2012 things cooled down for these dealers as a law prohibiting cars, that are older than 3 years, from being imported and sold in some of the GCC countries. Even though it doesn’t resolve the issue we discussed earlier, and ‘bad’ vehicles are still being sold in the market, buyers need to ensure they thoroughly check any car before purchase and ensure comprehensive testing is conducted prior to parting with any money (advance or full payment).

A very positive announcement was made by Emirates Authority for Standardization and Metrology (ESMA). It was reported by Gulf News that the existing import ban will now cover burnt out, water-damaged, rebuilt and non-repairable cars as well as vehicles with major manufacturing defects effective from 1st of May 2017


 

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