What happens when you have just changed jobs and work for a non-listed company, but still want a car loan in the UAE? Christian McAdam reveals all.

After living in Dubai for nearly four years, always making my way around the city in taxis or the metro, I decided it was time to buy a car.

Picking out a car turned out to be the easiest part of the whole process. I had been fortunate enough, a few years ago, to have borrowed a friend’s Toyota FJ Cruiser for six months and absolutely loved it. Ever since, I’d seen this as my ideal car.

The fact that the car itself is reported to have one of the highest resale values in the UAE and is a car I can off-road in the desert gave me enough justification to convince myself it was time to buy.

Buying a new car

I impatiently waited for the annual Ramadan deals and, in the middle of July, made my way down to the Toyota showroom. But…. they didn’t have any deals on the FJ Cruiser I wanted.

After speaking to the sales executive, it turned out the color and model I wanted wasn’t available in the showroom but I could wait six weeks for it to be shipped to Dubai. I had to pay a deposit of AED 2,000 to reserve it – yet it was actually still too early to be sure I’d get it, as the booking system didn’t show if anyone else had claimed the car.

It took two weeks for the news that I would be the proud owner of that FJ Cruiser, estimated arrival 26 August.

Five things you’ll need to give a car dealership when purchasing a car:

  1. Driving license copy
  2. Passport copy
  3. Resident visa copy
  4. Emirates ID copy
  5. Salary certificate letter

Financing a new car

Having anticipated a purchase, I had already called my bank to check out my options. Unfortunately my bank doesn’t offer car loans, so I was forced to look elsewhere. The choices provided to me by the dealership were very limited, as I had a lot of personal restrictions working against my application. So I was left with only one bank that would consider me for a car loan.

[Compare car loans in the UAE]

Four things that affect car financing options

1. A new job

I had recently moved companies, and had anticipated it would cause a few issues, but had no idea how much of a problem it turned out to be. I had to provide the last three months of bank statements but, because my last three monthly salary payments had not all come from my current employer, this proved to be a problem – particularly because my salary was being paid by check and I had been depositing it into my bank account.

The bank wanted my bank statements to specifically state the words ‘Salary Credit’ where my salary was shown. After speaking to HR and making many calls to my company’s bank, we were eventually able to do this- but my HR had to physically visit my bank and hand in a manual transfer slip stating that the transfer must appear as “Salary Credit”. However, if your company is paying you by WPS, there should be no issue, as it will automatically say “Salary Credit” on your bank statement.  But then again, I understand WPS is generally for bigger companies.

2. Salary transfer

One of my other options was to change to a bank that would give me a loan and then have my salary deposited into my new bank. However this would then mean a delay while I waited first to set up a new account and then for my next salary – and still an issue with the way it was paid in.

3. Working for a non-listed company

The next issue – my new company was not classified as a ‘listed company’ by the banks. So this took me down to just one bank that would give me a loan.

4. High risk

I was now deemed a higher risk customer because I was working in a new, non-listed company and wasn’t getting my salary transferred into an account with the bank giving me the loan. So instead of paying the 20 percent down payment mandated by the UAE Central Bank, I had to pay 25 percent upfront.

Six things the bank needs to set up your car loan

  1. Driving license copy
  2. Visa copy
  3. Passport
  4. Emirates ID copy
  5. Salary certificate
  6. Three months’ bank statements

The wait for my car

The process had now been going on a month. During that time, I kept checking with the dealership for updates on the car, to confirm it was still mine, and that it was on its way. Even the color I chose was new, so I only had a picture to go by.

By the third week of August, the bank got in touch. As I was still in my probationary period, they wanted a letter from HR confirming my employment would be continuing past my probation. Then they needed an updated salary certificate, as the previous one was now a month old.

My salary came in at the end of the month, and thankfully was marked ‘Salary Credit’ on my bank statement – tick.

At this stage, I assumed my loan application was approved and I could go get my car – only to be told it was still under consideration.

So the car was ready to collect from the 26th – but it took another week, until 2nd September, for the call to come through advising me that my loan was approved. Now for the next round of admin – a visit to the bank with my checkbook.

Final steps to get the loan

  1. Set up a bank account with the loan bank and deposit AED 1,460 into it for the loan set-up fees
  2. Set up a direct debit with my current bank to make the monthly loan payments, which would cost an extra AED 20 each month
  3. The loan would now be for five years rather than the four I wanted – a clerical error made during the processing of the forms could not be changed on the day
  4. Leave a signed, undated check for the full amount of the car loan plus interest, as per UAE Central Bank procedures.

It took 24 hours to set up the bank account and I then went to the nearest branch to deposit the funds.

Collecting the car

On 3 September, the dealership called to say the bank had sent them the money and I could come in to pay my 25 percent down payment and take my car. However, as I was on my way in the taxi, another hitch – a call to say the car had accidentally been sent to Abu Dhabi.

Still, I headed over to pay the down payment. Much confusion as I tried to pay with a debit card, as the withdrawal limit is AED 10,000 a day. So I had to leave, go to my bank the next morning to draw out the cash and then return to Festival City the next evening with the full 25% deposit, in cash, in my backpack – and my car finally in Dubai and waiting for me.

Car registration and Salik

Getting my new car registered actually took five tedious hours.

The system had gone down at the showroom, so the sales executive had to travel from the showroom to a main branch to get the number plate registered. Luckily I had the cash for the AED 450 registration fee I hadn’t known about. Sadly it also meant I ended up with a ‘J’ plate rather than the new ‘P’ plate I was expecting, as old, unused plates go back into the system at the main branch and I was allocated one of those.

You have a grace period of 10 days to register a car for the Salik road toll and get your tag but I wasn’t taking any more chances. I drove to the nearest gas station and registered it straightaway.

Finally the FJ Cruiser was mine….