AlgoDriven – the leading, Dubai-based automotive data platform – announces new data revealing the dramatic fall in used car prices, in the UAE, in 2023.
AlgoDriven’s data shows average depreciation over the year of 14.8% – a startling year-on-year fall – with 2022 only recording a 2.5% drop. The significant price fall reflects a softening in the used car market as new car inventory levels increased post Covid’s impact on the automotive industry’s production levels.
AlgoDriven’s data also shows used cars were selling almost twice as fast in the market at the end of 2023 as they were at the start of the year. On average, it only took 19 days for used cars to sell in December.
AlgoDriven anticipates that 2023’s falls will continue during 2024, and forecasts average depreciation of c. 15%+ for the upcoming calendar year.
Despite this, it is not predicted prices will fall further to pre-Covid levels, as the UAE’s automotive industry looks set to benefit from surging immigration and the country’s image as a thriving digital business and financial hub.
For UAE buyers seeking cars holding their value most optimally, AlgoDriven’s data shows the highest residual values for the Toyota Prado, the Honda Accord, and the Jeep Wrangler – based on a three-year period. In the luxury market, the Company’s data reveals the BMW X5, the Porsche 911 and the Land Rover Range Rover Sport are the best options.
In the electric vehicle (EV) market, uptake across the UAE continues on an upward trajectory. By 2023 year-end, the share of used EVs traded in the market increased by around 250%, with consumers increasingly considering environmental factors along with new technology adoption in their purchasing decisions.
Glenn Harwood, Co-founder of AlgoDriven, said:
“We are seeing a reversion to the long term mean of used car depreciation, as the after-effects of Covid – headlined by a distinct lack of quality used cars available – slowly dissipate. With new car options increasing and bringing discounts to the consumer, it is likely we will see another 15% reduction in used car prices over 2024.
“However, the strong macro environment in the UAE, a growing expat population and increased competition among used car retailers should mean the market stays buoyant.”