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The price of impatience
Thanks to the long wait for the delivery of new cars in the UAE, used car dealers are cashing in on the re-sale of almost new cars.
September 18, 2008 9:51 by kippreport
Looking to buy a Porshe Cayenne V6? If you want to book the latest 2009 model, be prepared to shell out Dh198,700 for the basic, with the rate going up to around Dh225,000 with accessories.
But if you are impatient and don’t mind a 2008 model, re-sale dealers will sell you an almost new car, which has zero kilometers and the options of leather interiors, a two-year manufacture warranty, a panoramic sunroof, triptonic transmission, riya sun blinds, CD player, air conditioning and so on. The price? Dh279,000.
While premiums in the real estate resale market have now become an accepted fact, dealers from the automobile resale market too are starting to jump the band-wagon. The premiums could be anywhere in the range of 10 to 25 percent.
Usually, the value of a vehicle begins to depreciate the minute it is bought by the first buyer. However, in the case of these second-sale “new” vehicles, the jump in prices is justified on the ground that they have done zero kilometres and are on resale merely by virtue of claims that they are “unwanted gifts” or “unavoidable sales.”
A Dubai-based resale dealer whom The Business Weekly spoke says,“We do so because we can,” pointing to the willing market that exists for such offers. What essentially spurs such demand is the long wait that one has to contend with when the vehicle is booked at the showroom of the authorized dealer.
“This is very common with popular models like Porche Cayenne, BMW X5 and BMW X6,” says another source to TBW.
A BMW X5 (V6 30L Si) with its authorized importer in Dubai, starts at a price of Dh245,000, (Dh280,000 on second sale with a dealer) but a current booking of the vehicle entails a wait of a minimum of three months. The waiting period for delivery in the case of a Porsche Cayenne, too, can be anywhere between four and six months. It is this delay that the secondary sale market is cashing in on.
Much of this wait comes about because of the tight production cycles of these models. The production line takes around two months to build the car and another two months for transportation, with the result that the authorized importers have a huge backlog of bookings with them at most times.
According to industry sources, there is also the issue of some dealers bringing in cars which do not have GCC specifications and passing them on to customers. Though the authorized importers have policies and systems in place to identify such cars and put their owners on a central blacklist, this can be done only if it is brought to their notice. Also, as sources say, claims about “zero kilometers” are just a figure of speech as there is always the delivery mileage of around 100 to 200 kilometers on the odometer.
First seen on The Business Weekly