New vs Used: Which Car Makes More Sense for UAE Buyers in 2025

Abu Dhabi: In a car-buying journey, there is always this puzzle of deciding whether to buy new or used. And, the question isn’t always a simple yes or no, far from it. There are several factors in play here, and the ultimate decision boils down to your budget, how long you wish to own the car, what features matter most to you, and your usage patterns.  

The argument of buying a new or used car isn’t a winning one simply because both cars come with their inherent pros and cons. Deciding one is solely dependent on an individual. In a new car, you get the latest tech, warranty coverage, and better financing options. But you must know they depreciate faster, and the prices are high. Whereas used cars are more affordable, depreciate more slowly, and often have lower insurance premiums. On the flip side, though, they most need more maintenance early on and come with fewer warranty protections. 

So, which one should you consider in 2025? Right now, the market seems to be favourable for used cars more attractive, with fewer late-model options and higher prices. To help all the buyers out there in the UAE, we try to deep dive into the current market scenarios to help you with the real difference in picking one.

The New Car Argument

Given a chance, every car buyer wishes to drive a brand-new car from the showroom. Simply because it feels exceptionally good, being a first owner and everything shiny and perfectly working conditions, with no doubt on any aspect of the car. But real life isn’t that simple because every choice comes with its own weight. Here's the practical side: new cars come with lower interest rates. Banks are more comfortable financing them. In the UAE, you're looking at rates between 3.5% to 6.9% annually for new cars. Your lender sees less risk because the car holds value better in the first year, and there's a warranty backing it.

But they are expensive

Your new car loses 9-11% of its value the moment it leaves the showroom. Not when you drive it home, when you leave the dealer's lot. In the first year, expect 20-30% depreciation overall. By year three, you're looking at losing 60-70% of what you paid. After five years, your car is worth about 40-50% of the original purchase price.

The numbers look rather scary. A new car priced at AED 100,000, in one year, it's worth around AED 70,000-80,000. By the 5th year, its value went down AED 40,000-50,000. That's a loss of AED 50,000 to 60,000, more than half, and most people don't keep cars that long in the UAE anyway.

Flip the Coin to A Used Car

The reality is that when you check out any used car at a dealer, it has already taken a big depreciation hit. A car 2-3 years old has already gone down in value, a rather steep drop. What you pay is closer to what it will be worth when you sell it. The depreciation rate slows significantly after the first few years.

The fact is that in 2025, the overall used car market in the UAE is quite stimulating with a lot of buyer activity. It continues to grow over the next five years. And it is not hard to figure out why. Most buyers are open to buying a used car as it seems to work in their favour financially. Not just that, but it is worth noting that there are plenty of options at various price points, and also trust has gone up.

Also, the depreciation rates for used cars are actually slowing down now. Used car values increased by 4-10% last year, which generally never happens. As buyers are increasingly holding onto their cars longer, the quality of used inventory is higher than ever. Certified pre-owned programs now offer warranties and inspections, which removes a lot of the risk.

But if you wish to finance your used car, be ready to shell out more loans as the interest rate is higher, typically 6.5% to 8.9% per annum. Which turns out to be 2-3% higher than new cars. Yet, your EMI will be lower given that the financial amount is a lot smaller.

Factor	New Car	Used Car
Depreciation (Year 1)	20-30% loss	Already occurred
Depreciation (Year 5)	Up to 40-50% loss	Slower (15% or less per year after Year 3)
Example 5-Year Cost	Highest; AED 30,200+ costlier	AED 30,200+ savings vs. new
Value for Money	Lower (rapid early depreciation)	Better—pay less for more features
Best For	Long-term keepers, luxury buyers,	3-5 year owners, first-time buyers,
	warranty seekers	value seekers, feature hunters
Market Trends	Stable supply; OEM finance	Booming demand, flexible CPO finance
CPO/Certified Programs	Standard	Growing, adds trust and support

Price Calculation

But buying a car isn’t about the monthly payments alone. Rather, that is a short-sighted approach that may not be a financially wise decision to make. Take a look at the blow table to understand it better. Let's assume you’re buying a Toyota Camry.

Particular	New Camry	Used Camry (3 years old)
Purchase Price	AED 95,000	AED 55,000
Down Payment (20%)	AED 19,000	AED 11,000
Loan Amount	AED 76,000	AED 44,000
Interest Rate (per year)	4.5%	7%
Tenure (years)	5	5
Monthly Payment	AED 1,400	AED 870
Total Monthly Difference		AED 530
Total Savings (60 months)		AED 31,800
Estimated Resale Value	AED 38,000-48,000	AED 32,000-38,000
Total Cost After Resale	AED 55,000-65,000	AED 24,000-34,000
Cost Difference		Over AED 30,000 savings

Which one to buy

Now, after covering the pros and cons of both used and new cars, with the table explaining the clear price advantage. Which one should you buy? Go for a new one if you plan to keep the car beyond five years. Once you hit the 5-year mark, depreciation slows down significantly, somewhere between 15-20% per year. If you're planning to drive it for 10 years, the initial depreciation doesn't matter as much. The spread that cost over a decade, and the financial calculation changes in your favour. A new car comes without maintenance headaches, as the warranty also covers it.

Whereas a used car makes sense if you plan to keep the car for 3-5 years. This actually is an average of the UAE's typical ownership period. If you're going to resell or trade in, you want to avoid that steep new-car depreciation cliff. In fact, sedans are designed for this.

You get better value, more features and a higher specs model or a luxury brand for the same price. For example, a 2022 Audi A4 used for AED 60,000 beats a 2025 Hyundai Elantra new for the same price. Real story, real difference. You're a first-time buyer. If you're not sure what you want, used car lets you test the market without losing AED 30,000+ to depreciation on day one.

But what about the quality? Well, a lot of buyers have serious concerns about the quality and reliability of used cars. And rightfully so. But things have improved a lot of late for the good in the UAE market. The Japanese brands like Toyota, Honda, Nissan, and others are well respected for their reliability and so the depreciation is slower. Let's say, a well-maintained 3-year-old Toyota will give you trouble-free years ahead. The previous owner took better care of it because they wanted to sell it well.

You'd better check the history of the car ownership through inspection, RTA records for accidents and also checking maintenance records. A used car with full service history and no accident marks is safer than a gamble on a new car with an unknown future. Often, GCC-spec cars, built for the hot climatic conditions, are important. They have better cooling and dust protection. Make sure you're buying GCC-spec, not imported from elsewhere. What you certainly avoid is a car that has covered a lot of mileage. Something like 100,000 km is clearly no-go territory; however, 50,000-60,000 km on a 2-3 year old car should be a great choice.

2025 market scenario 

In the current year, all market indicators are pointing towards a much more suitable and healthier used car market than it has been in years. The reason for this optimism is that the prices are more stable. Financing options are flexible, easily available, and the cost has come down considerably for monthly payments. The new car inventory is rather robust, which means dealerships are offering better deals. But used car inventory is even better quality because older cars are staying longer on the roads. The interest rates are competitive across both segments. As the market becomes competitive, banks are aggressively looking for growth and thus are being generous to get your business. It is fair to say that 2025 is a buyer's market, whether you go new or used. 

Conclusion 

Not the easiest decision to arrive at, so what should you do? We recommend a thorough analysis of your needs, usage change and budget is necessary. Buying a car is not just a financial decision but also a huge commitment. So ask three questions before arriving at a final decision. How long will you keep this car? What brand do you want? And lastly, what's your budget? Once you answer these questions satisfactorily, you will know whether a brand new car or a 2/3 years used car is best for you.