So when buying a new car, it’s worth remembering that the higher your car’s value, the more expensive the insurance will be – a hidden additional cost people often forget when budgeting for a new car in the Emirates.
Below are a few factors that insurance providers take into account before giving you a quote.
- Age: The driver’s age and how long they have been driving will determine the cost of their insurance. For example, a service provider can add approximately 15 percent to your insurance cost if you’re aged between 25 and 30 years old. If you have been driving for under a year then your insurance may be more expensive.
- Year: The year in which your car was manufactured will affect the cost of your insurance. If your car isn’t new, insurance providers may want to inspect it before quoting you. It is generally a good idea to seek a second, professional opinion yourself when buying a new car and pay for a vehicle inspection and valuation before you part with your hard-earned cash.
- Value/ model: The more expensive your car, the higher the insurance, particularly if you’re under 30. Worth remembering when you’re about to buy that fancy sport car.
- No Claims Discount: If you have been driving a number of years and haven’t made any claims, you can ask for a discount from your service provider and get some dirhams off your policy. You can often transfer your no claims bonus (NCB) from another country so it’s worth bringing your NCB certificate with you if you’re relocating to the UAE and asking when you’re getting quotes.
The biggest difference to the cost of your insurance is the kind of policy you choose, third party liability insurance (the minimum, mandatory level) or comprehensive insurance.
- Under third party insurance, you will be protected from any legal repercussions in case of an accident caused by you, including death or injury.
- With a comprehensive policy, any damage to your car will also be covered.
- Blood money – a payment to the family of someone killed, under Sharia law – is covered by both insurance types but it’s worth checking to what level before you pick your insurance cover.
Generally your insurance provider will give you optional additional benefits (at additional cost) such as off-road cover or roadside assistance/ breakdown cover. For example, if you enjoy dune bashing, you should get a policy with off-road cover. Also, check if your policy covers driving in other GCC countries – many people forget to check if they are actually covered when popping over the border to Oman and have to buy additional insurance cover at the border. You can compare car insurance policies available in the UAE and get a quote within the a few hours.
Another important cost to keep in mind before purchasing a car is its resale value. According to Middle East car buying site sellanycar.com, the moment you buy a new car it loses 20 percent of its resale value, with Mercedes-Benz, Hyundai and Ford models losing most over five years and Japanese brands Nissan, Toyota, Honda and Mitsubishi losing the least.
Sellanycar.com also revealed the top 10 resale value cars in the UAE. The Toyota FJ Cruiser ranked number one as it retained the maximum value at five years on the road in comparison to other cars. The Toyota Tacoma and Jeep Wrangler came second and third respectively. In fact out of the top 10 cars, four were Toyota models with resale values ranging from 50 to 80 percent after five years of using.
Buying a car is an investment, and car insurance ensures you are protected on the roads – so spend the time to choose not just your car but your car insurance, and to shop around when your insurance is due for renewal each year.