UAE: Rain-Damaged Cars Enter the Market for Sale After Recent Floods

Omar Abbas - | Arab

Industry insiders have reported that damaged vehicles in the United Arab Emirates started showing up for sale on unregulated markets, such as classified websites, following the country's historic rainfall on April 16.

Assessing the Impact of Rain-Damaged Cars on the Market

The aftermath of the unprecedented rainfall in the UAE on April 16 has led to a surge in the number of vehicles entering the open market, particularly on classified websites, despite concerns about their condition. With estimates suggesting thousands of vehicles were damaged during this historic downpour, insurers are inundated with claims, and garages are struggling to keep up with repair demands. As the market absorbs these flood-damaged vehicles, industry experts weigh in on the potential implications for buyers and sellers alike.

Sebastian Fuchs, from Auto Data Middle East, confirms the emergence of rain-damaged vehicles in the market approximately one-and-a-half months after the record-breaking rains. He notes a significant shift in buyer preferences, with increased interest in lower-priced vehicles ranging from Dh30,000 to Dh50,000. These buyers, whose claims were likely rejected due to driving through flooded roads, seek affordable replacements, prioritizing safety above all else.

Timing of Market Entry

Abhinav Gupta, CEO of the Gulf region at Cars24, observes a gradual entry of vehicles damaged to varying degrees into the market. While less severely affected cars have already surfaced, he anticipates a delayed influx of heavily damaged vehicles in the coming weeks. Gupta also highlights the prevalence of distressed sellers resorting to platforms like Facebook Marketplace and classified websites to liquidate their assets.

The managing director of Al-Futtaim Automotive's Fleet and Pre-Owned Division, Carlos Montenegro, thinks it's too soon to state how much of an effect rain has on the market. The secondary market is also seeing a backlog of damaged automobiles as they undergo repairs or wait for insurance company examinations. To lessen the impact of any unfavourable outcomes, Montenegro has instituted rigorous quality control procedures to keep the market stable.

As of now, there hasn't been a significant drop in pre-owned car prices attributable to the influx of rain-damaged vehicles. Montenegro underscores the importance of rigorous quality control measures in preserving market integrity and customer trust. By upholding high standards of quality and reliability, dealers like Al-Futtaim Automotive aim to reassure customers and maintain market confidence.

In light of recent events, potential buyers are increasingly vigilant about purchasing flood-damaged vehicles. Abhinav Gupta notes a surge in inquiries regarding a vehicle's flood history, prompting dealers to explicitly assure customers of their inventory's flood-free status. This heightened awareness underscores the importance of transparency and trustworthiness in the automotive market, driving demand for regulated and reliable sellers.

The entry of rain-damaged cars into the market presents both challenges and opportunities for industry players and consumers alike. As stakeholders navigate these dynamics, transparency, quality assurance, and consumer trust will remain paramount in shaping the future of the pre-owned car market in the UAE.

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Omar Abbas
Omar Abbas
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