Having a car in the UAE is convenient as well as a long-term financial responsibility, which is very important for every buyer to understand. The purchase of a car is not the only real expense, but various expenses are added gradually over the next five years, which have a significant impact on the overall budget.

What Are the Main Costs of Car Ownership in the UAE?

The total cost of owning a car comprises several interconnected expenses:

• Loan payments (EMI): Typically represents 60% of monthly costs during the five-year financing period
• Vehicle depreciation: Your car loses 50-60% of its value over five years—the largest single cost component
• Insurance: Mandatory comprehensive coverage costs AED 1,200-2,700 annually, depending on vehicle value
• Fuel consumption: Annual fuel costs range from AED 2,600 (budget sedan) to AED 3,100 (SUV)
• Maintenance and servicing: Budget AED 1,500-2,500 annually for routine upkeep in the UAE’s extreme heat
• Registration and inspection: AED 380-530 annually after the first year
• Salik tolls and parking: AED 2,000-3,500 annually, depending on commuting patterns

The UAE’s intense heat (exceeding 45°C in summer) accelerates wear on batteries, air conditioning systems, and cooling components—making maintenance costs higher than temperate climates.

How Much Will a Budget Sedan Cost Over 5 Years?

A Toyota Corolla (AED 80,000) serves as a practical baseline for cost calculations. Most buyers finance 80% of the purchase price with a 20% down payment, resulting in a AED 64,000 loan.

Typical five-year costs:

• Monthly EMI (60 months at 3.5%): AED 1,100
• Insurance (comprehensive): AED 6,000 total (AED 1,200 annually)
• Fuel (13-15 km/L efficiency): AED 13,000 total (AED 2,600 annually)
• Maintenance and servicing: AED 7,500 total
• Registration and inspection: AED 2,210 total
• Salik tolls and parking: AED 12,000 total (AED 2,400 annually)

Total cash outlay: AED 106,710 over five years

The first and the biggest expense is related to the purchase or financing of the vehicle. If the car is purchased in cash, the initial cost is higher, while in the case of finance, the amount of down payment, bank charges and interest becomes a significant expense over the course of five years. Therefore, it is important to make a realistic assessment of your financial capabilities at the time of purchase.

Registration and licensing costs also have to be paid regularly every year. Issues such as RTA registration, number plates and vehicle tests add up to a reasonable sum in five years, which are often overlooked by buyers at the beginning.

Insurance is a mandatory and continuous expense, which is determined by the value of the vehicle, the model and the driver’s profile. The total amount of insurance premiums over a five-year period can be quite significant, especially if comprehensive insurance is chosen.

Fuel costs are the highest in everyday use. Although petrol is relatively inexpensive in the UAE, in the case of daily driving over five years, this expense becomes a large part of the overall budget, especially for vehicles with higher engine capacity.

Maintenance and service costs also increase over time. In the early years, the cost is low, but as the car gets older, the tyres, brake pads, batteries and other accessories need to be replaced, which demands a significant amount of money in five years.

Parking and toll charges cannot be ignored. In Dubai and other cities, annual parking fees, self-parking charges and Salik toll fees have to be paid regularly, which becomes a significant expense in the long run.

Vehicle depreciation, also known as depreciation, is a hidden but important aspect of the five-year cost. Most vehicles lose a large part of their original value in the first five years, which is clearly felt at the time of sale.

Fines and unexpected expenses are also included in the total cost. Expenses such as traffic fines, sudden repairs or additional insurance claim fees are often not included in the plan, but can actually be a financial burden.

Finally, it can be said that owning a car in the UAE is not just limited to the purchase but requires a full five-year financial plan. If all the expenses are taken into account, not only the financial pressure is reduced. Rather, having a car becomes a better and calmer experience.