UAE Automotive Loan Market, By Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), By Provider Type [Banks, NBFCs (Non-Banking Financial Services, OEM (Original Equipment Manufacturer), Others (Fintech Companies)], By Percentage of Amount Sanctioned (Less than 25%, 25-50%, 51-75%, More than 75%), By Tenure (Less than 3 Years, 3-5 Years, More than 5 Years), By Region, By Company, Forecast & Opportunities, 2018-2028
Published Date: February - 2025 | Publisher: MIR | No of Pages: 320 | Industry: BFSI | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationUAE Automotive Loan Market, By Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), By Provider Type [Banks, NBFCs (Non-Banking Financial Services, OEM (Original Equipment Manufacturer), Others (Fintech Companies)], By Percentage of Amount Sanctioned (Less than 25%, 25-50%, 51-75%, More than 75%), By Tenure (Less than 3 Years, 3-5 Years, More than 5 Years), By Region, By Company, Forecast & Opportunities, 2018-2028
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Market Size and Growth
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Market SizeThe UAE automotive loan market was valued at approximately USD 10-12 billion in recent years, with steady growth projected over the next few years.
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Growth RateThe market is expected to grow at a CAGR (Compound Annual Growth Rate) of around 5-7% from 2023 to 2028, driven by increasing demand for personal and commercial vehicles.
Key Drivers
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Rising Vehicle OwnershipThe UAE has one of the highest car ownership rates globally, with a strong preference for luxury and premium vehicles.
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Expatriate PopulationA large expatriate population, which often prefers financing options for vehicle purchases, contributes significantly to market growth.
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Competitive Loan OffersBanks and financial institutions in the UAE offer attractive interest rates, flexible repayment terms, and quick approval processes, making automotive loans more accessible.
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Economic GrowthThe UAE's stable economy and high disposable income levels support the demand for automotive loans.
Segmentation
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By Vehicle TypeThe market is segmented into passenger vehicles and commercial vehicles, with passenger vehicles dominating the market share.
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By Loan TypeIncludes new car loans, used car loans, and refinancing options.
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By TenureLoans are typically offered for periods ranging from 1 to 5 years, with some extending up to 7 years.
The UAE automotive loan market is witnessing robust growth over the duration of the forecast period with the advancement of digital technology, a rise in the number of financing aggregators, population's growing awareness towards automotive loan and increase in the number pf privately own cars. Additionally, the rising cost of owning a vehicle in the UAE has made it more difficult, which has boosted the market for automotive loans.
An auto loan is used to purchase a vehicle. Automotive purchasers in the UAE have two primary options for lendinga bank or a dealer. For a bank loan, the customer must visit a branch and complete an application. If the customer's credit is accepted, the bank will do a credit check and offer them a loan at an interest rate based on their credit score. With dealer financing, customers can negotiate a deal directly with the dealership. They might be eligible for a lower interest rate and be exempted from a credit check. However, they could also need to put down additional money.
According to article of 2022, survey of Abu Dhabi reveals that 52% of UAE residents are contemplating hybrid or electric vehicles as a result of the increase in fuel prices, while 25% stated they're waiting for more EV alternatives before deciding.
Growing Digitalization of Financial Institution Fueling the Market Growth
The automotive loan industry is implementing more advance technological innovations in an effort to increase operational profitability and customer satisfaction. Customers have become accustomed to digital information in sectors like banking and telecom. Many are also beginning to digitally experience their vehicle purchasing process.
Rising Preference of Personal Vehicle in UAE Fuels Market Growth
Low import and fuel prices, a favorable tax structure, and high discretionary incomes in the UAE have all aided in the growth of the automotive industry and enticed multinational manufacturers like Toyota, Nissan, Mitsubishi, and others to locate here and begin production.
Surging Demand of Electric Vehicles to Fuel the Market Growth
With the rising of petrol cost, the demand of electric vehicles are gaining popularity in UAE. Automobile industry officials confirmed that as new brands enter the UAE, more and more drivers, particularly those who frequently travel between different emirates, are moving to electric vehicles.
Market Segmentation
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Key Players
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BanksEmirates NBD, Abu Dhabi Commercial Bank (ADCB), Dubai Islamic Bank (DIB), and Mashreq Bank are among the leading providers of automotive loans in the UAE.
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Financing CompaniesCompanies like Al Futtaim Finance and Arab Financial Services also play a significant role in the market.
Challenges
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Regulatory ChangesChanges in banking regulations and interest rate fluctuations can impact the market.
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Economic UncertaintyGlobal economic conditions and oil price volatility can affect consumer spending and loan uptake.
Future Outlook
The UAE automotive loan market is expected to continue its growth trajectory, supported by increasing vehicle sales, technological advancements in the automotive sector, and the introduction of electric vehicles (EVs). The government's push towards sustainability and green energy is also likely to influence the market dynamics
Company Profiles
Dubai Islamic Bank Public Joint Stock Company, Al Hilal Bank PJSC, Emirates NBD Bank PJSC, Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank Public Joint Stock Company, Ajman Bank PJSC,
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Attribute |
Details |
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Base Year |
2022 |
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Historical Years |
2018 – 2021 |
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Estimated Year |
2023 |
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Forecast Period |
2024 – 2028 |
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Quantitative Units |
Revenue in USD Billion and CAGR for 2018-2022 and 2023-2028 |
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Report Coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
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Segments Covered |
Vehicle Type Provider Type Percentage of Amount Sanctioned Tenure Region |
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Regional Scope |
Dubai, Abu Dhabi, Sharjah, Ajman, and Rest of UAE |
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Key Companies Profiled |
Dubai Islamic Bank Public Joint Stock Company, Al Hilal Bank PJSC, Emirates NBD Bank PJSC, Abu Dhabi Commercial Bank PJSC, Abu Dhabi Islamic Bank Public Joint Stock Company, Ajman Bank PJSC, Arab Bank Group, The National Bank of Ras Al Khaimah PJSC, Dunia Finance LLC, Reem Finance P.J.S.C. |
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Customization Scope |
10% free report customization with purchase. Addition or alteration to country, regional & segment scope. |
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Pricing and Purchase Options |
Avail of customized purchase options to meet your exact research needs. Explore purchase options |
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Delivery Format |
PDF and Excel through Email (We can also provide the editable version of the report in PPT/pdf format on special request) |
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