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How to start a used car trading business in Dubai, UAE

There are an estimated 3.5m cars on the road in the UAE. Incredibly, 40% of these – that’s 1.4m – are in Dubai, despite the emirate having just 3.3m residents. And, as rates of new car sales fall, the used car market is thriving.

So, if you’ve got the skills and knowledge to see success buying and selling second-hand vehicles, there’s never been a better time to get started. But before you do, there are a few things you’ll need to consider. In this article, we’ll cover:

• An overview of the used car business in Dubai and the UAE
• Steps to start a used car company in Dubai, UAE
• Cost of opening a used car trading business in Dubai
• How to grow a used car trading company in Dubai, UAE
• Is used car business profitable in Dubai?
• Is flipping cars in Dubai worth it?
• How Creative Zone can help

An overview of the used car business in Dubai and the UAE

As new car sales decline, activity in the used car market is moving in the other direction. In 2019, around 830,000 used cars were sold in the UAE – that’s 3.5 for every new car purchase. By 2025, used car sales are expected to exceed one million per year.

This vast and growing market was estimated to be worth USD 20bn last year and is expected to grow by a CAGR of 11% between 2022 and 2027, ultimately reaching a worth of USD 32bn.

With car ownership rates in Dubai at an all-time high and increasing alongside the population, there is a great opportunity on offer for used car trading out here in the UAE.

Steps to start a used car company in Dubai, UAE

The process of starting a business in the UAE has been designed to be fast and straightforward. However, it does require knowledge of the country and its business practices. For that reason, it is always advisable to speak to a local expert before getting started.

After a short consultation to understand your requirements, we will guide you through the following process:

1 – Registering Your Company Name
The first important step when starting a used car business here in Dubai is choosing a company name. When making this decision, there are a few conventions that you’ll need to keep in mind.

In short, you may not include any words that could be considered offensive or blasphemous in your company name. Your name must also not contain any similarities to existing businesses or institutions.

Your company name must also be available to register, so it is a good idea to put forward a few options in case your first choice is unavailable. Once you have made your decision, we will submit your trade name registration on your behalf.

2 – Acquiring a Business License
Once you have decided on your company name, it’s time to apply for your used car trading license. The process here will differ slightly depending on whether you’re setting up in the mainland or in a free zone.

Free zone license applications are handled by the relevant managing authority while mainland license applications are handled by the Dubai Department of Economic Development.

Your dedicated contact at Creative Zone will take the time to understand your requirements before advising on the best setup for your needs. We will then manage the license application on your behalf.

3 – Completing the Visa Process
You will need a visa as well as a trade license to live and work in the UAE. While this process is slightly more involved than the license application, it has once again been designed with ease in mind.

As part of your visa application, you will need to undergo a medical, fitness test, blood test and a chest x-ray. You will also need to submit biometric scans to obtain your Emirates ID.

Once more, your Creative Zone contact can guide you through every step to ensure a quick and straightforward application.

As a UAE residency visa holder, you can also sponsor dependants through their applications. Dependants can include your children, spouse, parents and any domestic staff.

4 – Opening a Bank Account
The final step before you can start trading freely in the UAE is opening a corporate bank account.

This is the most difficult step of the process for non-GCC citizens. However, the team at Creative Zone can make it easy. We have relationships with many banks in the UAE and can advise on the one that is most likely to offer the banking services you require.

Cost of opening a used car trading business in Dubai

The cost of a used car trading license in Dubai is AED 13,800. However, there are many more costs to consider on top of this.

You will also need to account for visa costs, as well as premises and staffing if required. If you are setting up in the mainland, you may also require additional permits before you can trade.

For a full and personalised breakdown of the costs involved, get in touch with the team at Creative Zone.

How to grow a used car trading company in Dubai, UAE

One of the quickest and simplest ways to grow your used car business is to do your research and gain an understanding of what sells well out here. For example, SUVs account for almost half of all used car sales in the UAE, so you may want to stock these over more compact options.

Japanese brands are also very popular in the UAE, with Toyota accounting for over a third of all used car sales. You should also look to stock other popular brands such as Nissan, Mitsubishi and Hyundai.

It’s also a good idea to research sold prices. Setting the right price is one of the most effective ways to speed up sales, while inaccurate pricing can reduce trust.

As your business grows, you could look to expand beyond the UAE, too. With direct links via land and sea to all major markets around the world, exporting vehicles can be both straightforward and profitable.

Is used car business profitable in Dubai?

Absolutely. The average used car listing price in the UAE is around AED 102,000. And as new car manufacturing slows, we can expect this figure to rise in the years ahead.

You may be able to further increase the profitably of your sales by importing cars from neighbouring markets such as Asia or exporting to emerging markets such as North Africa.

Is flipping cars in Dubai worth it?

It certainly can be. The price you get for any car will depend on the vehicle’s type, condition, age and much more. But if you have the eye and the tenacity to seek out bargain sales, there is plenty of opportunity to flip used cars here in Dubai.

How Creative Zone can help

Creative Zone are experts in business setup in Dubai. So, we’re always on hand to help you start your used car business out here.

Our international team will you through every step of the company formation process, ensuring that it is fast, affordable and hassle-free. As well as managing your license and visa applications, we will liaise with all government departments and other authorities, so you can focus on getting ready to trade.

Find out more about what Creative Zone can do for you, and to get a bespoke quotation, leave your details at www.creativezone.ae/contact-us/

Prices offered by free zones are subject to change without notice. Please get in touch with Creative Zone for an updated price based on the current promotions and availability.

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