How to buy a car on installment or "credit" in the UAE

One of the most popular issues in the Emirates is buying a car on installment plan. In this article, let's analyze what you need to know in order to buy a car on installment or on "credit".


A down payment or deposit is required, which is a certain percentage of the full value of the car. The amount of the down payment varies depending on the bank or financial institution, but on average it is 10%-30% of the value of the car.


Loan repayment schemes after down payment:

  • Monthly payments: This is the most common payment plan. The customer is required to pay a fixed amount each month for a selected term of 12, 24, 36, 48, or 60 months. The payment amount includes part of the principal and interest.

  • Quarterly or semi-annual payments: This option allows you to pay your debt in quarterly or semi-annual intervals. Convenient for borrowers with irregular financial flows.

  • Flexible Payment Plan: Some banks and financial institutions offer flexible payment plans. It allows you to choose different payment options, including changing the amount you pay each month or making additional payments.

Typically, repayment terms range from 1 to 7 years. It is worth noting that the longer the repayment term, the greater the total loan payment will be as a result of the interest rate.


Factors affecting the interest rate when buying a car in the UAE:

  • the term of the loan or installment plan;

  • bank or dealer;

  • credit history;

  • the characteristics of the car and other conditions of the transaction. 

They start at 2% to 4% per annum and go up to 7% and above. Possible range of interest rates in the UAE depending on the term of the loan or installment:

  • Up to 1 year: approximately 2% to 4% per annum.

  • 1 to 3 years: approximately 3% to 6% per annum.

  • 3 to 5 years: approximately 4% to 7% per annum.

  • over 5 years: the interest rate is higher and varies depending on the bank or financial institution.


List of major banks that provide car loans and installment services in UAE:

  1. Emirates NBD - offers various financial services including car loans and installment services.

  2. Abu Dhabi Commercial Bank (ADCB) - provides car loans and financial services

  3. Dubai Islamic Bank (DIB) - This bank specializes in Islamic financial services including Islamic car loans.

  4. Mashreq Bank - offers car loans and installment loans for the purchase of cars.

Examples of interest rates in the UAE provided by several major bank:

  • Emirates NBD: for a loan of up to AED 100,000 for up to 48 months, the interest rate ranges from 3.49% to 4.49% per annum.

  • Abu Dhabi Commercial Bank (ADCB): For loans of up to AED 250,000 for up to 60 months, the interest rate ranges from 3.99% to 4.99% per annum.

  • Dubai Islamic Bank (DIB): Loans of up to AED 1,500,000 for up to 60 months bear interest at the rate of 3.49% to 4.99% per annum.

  • Mashreq Bank: for a loan of up to AED 500,000 for a period of up to 48 months, the interest rate ranges from 2.99% to 4.49% per annum.


The stages of buying a car on installment or credit in Dubai:

  1. Selecting a car: Decide on the make, model and budget you are willing to allocate.

  1. Choosing the right offer: Explore the various offers from banks, financial institutions and car dealers offering car loans or installments in Dubai. Compare terms and conditions, interest rates, document requirements and other aspects to choose the best offer.

  1. Preparing the necessary documents: You will need the following documents to obtain a loan or installment loan: Resident Identification Card (Emirates ID), passport, driver's license, copy of visa, bank statement of income, copy of employment contract or other documents confirming your ability to pay the loan.

  1. Applying for a loan: Once you have chosen an offer, contact your bank or car dealer to fill out an application for a loan or installment. Additional documents or information may be required, so be prepared to provide all necessary information.

  1. Credit assessment: A financial institution or bank will evaluate your creditworthiness to determine your ability to pay back the loan in full and on time in the future. This includes a check of your credit history and income.

  1. Getting approved: After the application is reviewed and evaluated, you will receive notification of the loan or installment decision. If approved, you can move on to the next step.

  1. Closing the deal: Negotiate all the terms and conditions of the loan or installment plan, and sign the necessary documents. Make sure you fully understand the terms of the deal, including the interest rate, payment schedule and any late fees.

  1. Paying the deposit: You may be required to pay a deposit or down payment before you receive the car. Ask the seller or the bank about this.

  1. Getting the car: After the deal is done and you pay the deposit or down payment, you will get the car.


Large car dealers that offer credit or installment payment services for the purchase of cars:

  1. Al-Futtaim Automotive

  2. AGMC (Authorized BMW Dealer)

  3. Trading Enterprises (Authorized Volvo Dealer)

  4. Arabian Automobiles (Authorized Nissan, Infiniti, and Renault Dealer)

  5. Al Nabooda Automobiles (Authorized Porsche and Volkswagen Dealer)

  6. Gargash Enterprises (Authorized Mercedes-Benz and Smart Dealer)

  7. Juma Al Majid (Authorized Hyundai and Genesis Dealer)


There are penalties for late payments on a car installment or loan in the UAE. The terms and amounts of penalties vary depending on the bank or financial institution with which you have entered into the transaction.

Types of penalties provided:

  • Penalties for late payments: If you fail to make a late payment or default on a loan or installment payment, the bank charges a fixed penalty amount or a percentage of the overdue amount.

  • Penalties for late payment: In addition to penalties, you may be charged a penalty for each day of late payment. 

  • Interest rate increase: The bank may also increase the interest rate on the loan or installment loan as a result of late payment.

Keep in mind that each bank or financial institution has different requirements and procedures. Be sure to contact the bank or car dealer for detailed information and instructions before buying a car on installment or credit in Dubai.