New Guide to Buying a Car in the UAE—Total Ownership Cost Explained

Abu Dhabi: Owning a personal vehicle is an aspirational goal for an average Emirati; it not only signals one's status but also assures personal freedom of mobility, which is also a necessity. Driving is not only more productive but also convenient and makes life easier, taking care of safety too. In this context, buying a car for an individual or family is a huge personal milestone. In the UAE, buying a new car is not just about the upfront price that you pay at the showroom. This is just half the ownership story; the other half, and perhaps the real number that matters, is what you will end up paying over the years you own it. It is often noticed that most buyers in Dubai, Abu Dhabi, and the rest of the Emirates focus on monthly instalments or the upfront cost. But insurance premiums climb every year, fuel costs fluctuate monthly, and that shiny new car loses 20-30% of its value in the first year alone. Then come the service bills, which pile up differently depending on whether you bought a Toyota or a BMW. 

Things you can’t avoid include the annual registration fees and depreciation that never really stops. And the difference between what you think you'll spend and what you actually spend can be tens of thousands of dirhams. In this comprehensive guide we break down the real cost of car ownership in the UAE, not the marketing version, but the actual ownership version.

What's Your Monthly Budget for Car Payments?

Now as you start the journey towards buying your all-new personal vehicle, before anything else, figure out what you can actually afford monthly. Not what the salesman says you can afford it. The advertised price should not be confused with what the bank approves but with what you can pay without stress or any financial issues for 48-60 months.

Most banks in the UAE finance up to 80% of the car's value for residents. That means an AED 100,000 car needs AED 20,000 upfront, plus registration, insurance, and other fees. Your monthly payment depends on the loan term and interest rate, which in early 2026 ranges from 2.99% to 4.5% for good credit.

Here's what that looks like:

Car Price	Down Payment (20%)	Loan Amount	Monthly Payment (48 months @ 3.5%)	Monthly Payment (60 months @ 3.5%)
AED 60,000	AED 12,000	AED 48,000	AED 1,068	AED 873
AED 100,000	AED 20,000	AED 80,000	AED 1,780	AED 1,455
AED 150,000	AED 30,000	AED 120,000	AED 2,670	AED 2,182

However, the monthly payment is just one component; additional costs include insurance, fuel, maintenance, and registration. These costs don't stop when the loan ends.

How Much Does Insurance Really Cost in 2026?

Insurance is mandatory in the UAE; the comprehensive coverage in Dubai runs from AED 1,200 to AED 5,000 annually depending on your car's value and your driver profile. Third-party coverage, the legal minimum, costs AED 450 to AED 1,000.

The calculations work like this:

For cars under AED 100,000, the base rate is around 2.5% of the car's value. For cars between AED 100,000 and 300,000: The rate drops to roughly 2.35% For cars over AED 300,000: The rate sits at about 2.2%

Then discounts and surcharges stack on top. Clean record for one year? 10% off. Three years? 20% off. Under 25 years old? Add 25%. Between 25 and 30? Minus 15%. Over 30 but under 60? Add 10%.

An AED 80,000 car for a 27-year-old with two years of no-claims bonus would cost roughly:

• Base: AED 1,880 (2.35% of AED 80,000)
• Minus 15% (age discount): AED 1,598
• Minus 15% (no-claims): AED 1,358

That same car for a 23-year-old with a new licence:

• Base: AED 1,880
• Plus 25% (age): AED 2,350
• Plus 25% (new licence): AED 2,938

The gap between these two scenarios is AED 1,580 annually. Over five years, that's AED 7,900 extra—just for being younger.

Depreciation: The Reality

Owning a vehicle has the biggest unavoidable factor: depreciation, and it doesn't feel like a cost because you don't write a cheque for it. But it's the single biggest expense of car ownership in the UAE. Monthly depreciation rates hit around 1-1.5% in 2026. That means a car listed at AED 100,000 today will be worth roughly AED 84,000-90,000 in one year, just as time passes. Over five years, you're looking at a 50-60% value drop.

Here's how it breaks down year by year:

Year 1: 20-30% loss (an AED 100,000 car drops to AED 70,000-80,000). Year 2: Another 15-20% loss (now worth AED 56,000-64,000). Year 3: Another 15% loss (worth AED 47,600-54,400). Years 4-5: 10% annual loss (settles around AED 38,000-44,000).

But brand matters here in a big way; Japanese brands—Toyota, Nissan, and Honda—depreciate slower because demand stays strong in the used market. Parts are cheap, service is everywhere, and their trust is huge.

This changes in the context of European, American or Chinese brands, which is to say that they depreciate a lot faster; luxury brands lose value faster. Chinese brands pose a significant challenge. They're flooding the market with value features and long warranties. But resale value? Unknown. There's no 10-year track record yet. Buyers are taking a bet.

Electric vehicles depreciate faster than expected. Battery replacement coverage ends after warranty. The charging infrastructure is still patchy. Used EV buyers in Saudi Arabia are cautious, which depresses prices.

The depreciation hit is real money. If you buy an AED 100,000 car and sell it after three years for AED 50,000, you've spent AED 50,000 just on depreciation. Add AED 12,000 in insurance, AED 9,000 in fuel, AED 6,000 in maintenance, and AED 1,200 in registration; that's AED 78,500 over three years, or AED 2,181 per month, even if the car was paid for in cash.

Fuel Costs: The Monthly Reminder

Fuel prices change every month in the UAE. January 2026 rates are AED 2.42 per litre for Special 95 gasoline and AED 2.55 for diesel. But December was AED 2.58 and AED 2.85. In the previous year, petrol prices consistently exceeded AED 2.70.​

Your annual fuel bill depends on your mileage and your car's efficiency:

Car Type	Fuel Efficiency	Annual Mileage	Fuel Cost (@ AED 2.42/L)
Compact sedan (Toyota Yaris)	15 km/L	20,000 km	AED 3,227
Mid-size sedan (Camry)	12 km/L	20,000 km	AED 4,033
SUV (Nissan Patrol)	8 km/L	25,000 km	AED 7,563
Luxury sedan (BMW 5 Series)	10 km/L	20,000 km	AED 4,840

If you drive 20,000 km yearly in a fuel-efficient car, you're spending around AED 270-340 monthly. In a large SUV? Closer to AED 500-630.

Hybrid vehicles cut the price significantly. A Lexus NX Hybrid gets 21.5 km/L. At 20,000 km annually, that's AED 2,251 in fuel versus AED 4,033 for a regular sedan. The savings compound every year.

Maintenance: Where Brands Diverge Dramatically

Another big annual expense is servicing your car to keep it running and also stay healthy. The service costs often separate brands faster than anything else. A Toyota Corolla oil change at a dealership costs AED 250-400. How much does an oil change for a BMW 5 Series cost? AED 800-1,000. And that's just oil.

Annual maintenance costs by brand (based on 2025 UAE data):

• Toyota: AED 1,200-1,800 (basic service packages start at AED 189)
• Honda: AED 1,200-1
• Nissan: AED 1,200-1,800
• Hyundai/Kia: AED 1,200-1,600
• Ford: AED 3,000-3,600
• Audi: AED 3,000-3,500
• BMW: AED 3,500-5
• Mercedes: AED 4,000-6
• Range Rover: AED 20,000-40,000
• Tesla/EV: AED 2,500

Japanese brands dominate the low-maintenance category because parts are abundant and simple. Independent workshops charge 40% less than dealerships using identical parts.

Luxury brands cost more because:

• Parts are expensive and often imported
• Specialized tools are required
• Dealer networks charge premium labor rates
• Complex systems (air suspension, active steering) fail more often

EVs sit in the middle. No oil changes. No transmission service. But battery diagnostics cost AED 1,200+. If the battery fails after the warranty, replacement can hit AED 30,000-60,000.

What you should also consider is that the UAE's climate accelerates wear. Batteries die faster in extreme heat, every 2-3 years instead of 4-5. AC systems work year-round. Tyres degrade quicker on hot asphalt. Brake pads wear faster in stop-and-go Dubai traffic.

Basic maintenance breakdown for a mid-range car:

• Oil change (every 5,000-10,000 km): AED 250-500
• Tire replacement (every 40,000-60,000 km): AED 1,200-2,500 for four
• Brake pads (every 30,000-50,000 km): AED 400-700 per axle
• Battery replacement (every 2-3 years): AED 300-600
• AC service (annually): AED 350-800

What Does Total Ownership Actually Cost?

Let's run real numbers on three common scenarios over five years:

Scenario 1: Budget Conscious (Toyota Yaris)

Purchase price: AED 65,000

• Depreciation (50% over 5 years): AED 32,500
• Insurance (avg. AED 1,400/year): AED 7,000
• Fuel (15 km/L, 20,000 km/year): AED 16,135
• Maintenance (avg. AED 1,500/year): AED 7,500
• Registration (AED 400/year): AED 2,000
• Total 5-year cost: AED 64,135
• Monthly ownership cost: AED 1,069

Scenario 2: Family SUV (Nissan Patrol)

Purchase price: AED 180,000

• Depreciation (55% over 5 years): AED 99,000
• Insurance (avg. AED 3,800/year): AED 19,000
• Fuel (8 km/L, 25,000 km/year): AED 37,815
• Maintenance (avg. AED 4,500/year): AED 22,500
• Registration (AED 650/year): AED 3,250
• Total 5-year cost: AED 181,565
• Monthly ownership cost: AED 3,026

Scenario 3: Luxury Sedan (BMW 5 Series)

Purchase price: AED 250,000

• Depreciation (60% over 5 years): AED 150,000
• Insurance (avg. AED 5,000/year): AED 25,000
• Fuel (10 km/L, 20,000 km/year): AED 24,200
• Maintenance (avg. AED 5,000/year): AED 25,000
• Registration (AED 700/year): AED 3,500
• Total 5-year cost: AED 227,700
• Monthly ownership cost: AED 3,795

The budget car costs AED 1,103 monthly in total ownership. The luxury sedan? AED 3,795. Over five years, that's an AED 161,520 difference—enough to buy two more Yaris models.

Resale Reality Check

When it's time to sell, your car's value depends on factors beyond your control:

What helps resale value

• Japanese or Korean brand
• Popular colours (white, silver, black)
• Full service history with dealer stamps
• Low mileage (under 15,000 km/year)
• GCC specs (not US or European import)
• Clean accident history
• Valid insurance and registration

What destroys resale value

• Modifications (body kits, tinted windows beyond legal limit)
• High mileage (over 25,000 km/year)
• Unusual colors
• Missed service intervals
• Accident history
• European luxury brand (high-maintenance perception)
• Expired insurance or traffic fines

The best time to sell is 3-5 years after purchase. Early enough that warranty coverage still matters, late enough to avoid the steepest depreciation hit. Selling before 100,000 km keeps you in a higher value bracket.

The Real Decision: Total Cost of Ownership

So by now you know exactly what car ownership is. And so stop thinking about car payments. But think about total monthly cost: payment + insurance + fuel + maintenance + depreciation.

An AED 60,000 car with an AED 900 monthly payment actually costs you AED 1,300+ monthly when you include everything. Could you afford an AED 150,000 car with a monthly payment of AED 2,400? You're really paying AED 3,500+ monthly.

The cheapest ownership strategy:

1. Buy a 2-3-year-old Japanese brand (Toyota, Honda, Nissan)
2. Choose popular colors and specs (white, mid-trim, GCC spec)
3. Drive 15,000 km yearly or less
4. Service at independent workshops with OEM parts
5. Maintain full records
6. Sell at 5-6 years before major repairs hit

The worst ownership strategy:

1. Buy a brand new luxury European car
2. Max out the loan at 80%
3. Drive 30,000 km annually
4. Service only when something breaks
5. Ignore depreciation
6. Keep it 10 years

What is the difference between these strategies over a decade? Easily AED 200,000+.

In Summary 

So it is pretty clear and also obvious that buying a car in the UAE requires calculating beyond the showroom price. There are literally several factors that cost money, and you need to consider each one of them carefully before arriving at your actual price of owning a brand new car or even a used one. Taking every expense seriously, considering its impact on your wallet and then making an informed decision is highly valuable in your journey to not only own a dream car but enjoy the ownership and having fun every single kilometre you drive alone or with your family. All this is possible once you take care of the financial elements of it and are comfortable with full knowledge and information to fulfil your dream of car ownership. We tried covering every possible element of car ownership, and this should serve you as a solid guide. Ultimately, it is not rocket science and certainly doable; it's just that you need to pay a little closer attention and be more intentional with your choices.