Dubai: Now is a great time for people in the UAE to buy a car, whether it’s new or used. Prices are lower than they’ve been in the last 5 years.

New car prices are under pressure, and banks are offering some of the best financing deals. This includes car loans with 0% interest for several years, or 0.99% for more expensive cars. More models are now available with 0% interest for 3-5 years, showing that dealers and banks are working hard to keep buyers interested despite high interest rates.

The only cost that’s still high is car insurance, but new car buyers don’t have to worry because dealers are covering that. Some offers even include multi-year insurance for new cars. The drop in car prices is mainly due to a lot of models that were originally meant for the US market being sent to the UAE and other Gulf countries. Prices are falling for all brands and models in the UAE, except for high-end models coming from Europe.

Trump’s 25% tariffs on car imports are causing changes. Since April, the US has imposed a 25% duty on imported cars, and there are likely no exemptions. This is why car manufacturers are shifting their models to the UAE and Gulf markets.

When 2025 models are sold in the UAE at lower prices, other dealers and manufacturers have to lower their prices to stay competitive. Everyone is also noticing the quick rise of Chinese brands in the market, whether they make gas or electric vehicles.

Chinese brands have increased their market share from about 7%-8% at the end of 2024 to around 15% in mid-2025, pushing established brands to rethink their pricing strategies, said Sebastian Fuchs, Managing Director at AutoData Middle East.

For example, Jetour’s sales jumped 150% compared to last year, moving up to 4th place overall.

“New car prices in the UAE are expected to drop a bit, especially for US-made cars which will see the biggest fall.”

Chinese brands are eager to gain market share by offering new warranties and after-sales services. (Chinese electric vehicle makers are also trying to provide better insurance options after some owners faced higher renewal costs after the rains in April 2024 in the UAE.)

Price drops are ‘normal’
Dealers say that after a few years of rising prices, a drop is normal. The 25% tax on US car imports by Trump sped up these price drops in the UAE. This means it’s a great time for UAE consumers to shop for cars.

“This is the best time for buyers in many years with 0% interest, full insurance deals, and better resale prices as the dollar weakens,” said Sandeep Ganediwalla, a Partner at Redseer Consulting. “Dealers are also providing better service packages.”

UAE car sales in the first half of 2025
In the first six months, new car sales continued to do well, following trends from 2023 and 2024.

“The UAE car market grew by 13.8% in the first quarter, with January and February seeing strong growth,” said Sebastian Fuchs from AutoData. “The electric vehicle market is booming, up 62.2% in the first quarter of 2025, helped by government incentives and better charging stations. Tesla leads with a 43% market share, while BYD and MG are growing quickly.

“So even though pricing is changing due to global supply issues, the UAE market is still strong and active, with more consumer interest and increasing brand competition.”