Guide to Start a Used Car Business in Dubai

Jul 25, 2024 | Business Setup

The UAE’s used car market is experiencing significant growth, with used car sales in Dubai projected to reach $48.15 billion by 2030.

Starting a used car business involves both selling and purchasing vehicles. In this blog, we will outline 7-8 steps to help you set up a used car business in Dubai. If you’re interested in starting this venture, read through the entire blog to understand each step in detail and gain a clear understanding of how to get setup business in Dubai.

What are the Steps Used Car Business in Dubai

1. Market Research and Analysis

The first step you need to take is to thoroughly research the market. Use a SWOT analysis (strengths, weaknesses, opportunities, and threats) to understand the market better and apply it to your business.

This analysis will help you determine which market segment you want to focus on, whether it’s luxury cars, top-level cars, or low-budget cars.

2. Business Plan

You need to plan your business according to your budget. Based on that budget, you can determine the price range of the cars you want to acquire. You can source cars from the local market, direct sellers, auctions, or large-scale auctions (to bring in American cars).

3. Choosing a Business Structure

Choosing a business structure defines how your business operates. There are two main approaches: online and offline.

Online: Many businesses operate entirely online, like websites selling used cars (e.g., Dubicars). You can create a platform for people to advertise and sell their cars themselves or a platform for your showroom to list and sell vehicles.

Offline: This involves having a physical showroom where you display and sell cars.

You can also combine these approaches:

Omnichannel: This integrates both online and offline sales. You might have a showroom and also list cars for sale on your website or through third-party online marketplaces.

4. Location and Facilities

Now that you have defined your business structure, decide where you want to set up your business. If you choose free zone in Dubai or offshore locations in Dubai, keep in mind that car businesses there are mostly export-oriented. A better option might be to set up business on Dubai mainland, which caters to both local and export markets.

5. Registration & Obtaining Trade License

Visit the Dubai Economic Department (DED) and register your trade license with the activity of buying and selling cars in mind. Once you obtain the trade license, congratulations! You now have the legal authority to operate your business.

6. Opening a Corporate Bank Account

Having a trade license allows you to open a corporate bank account. With this account, you can conduct transactions locally or internationally under your registered trade name.

7. Source of Used Cars

Consider sourcing cars through three different levels. First, import American cars to Dubai. Second, purchase cars at low prices from direct sellers. Third, buy cars from large auctions like Emirates Auction.

8. Inspect and Recondition Used Cars

The used cars you buy will need to be inspected by the Roads & Transport Authority (RTA), local authorities, and the government before they can be registered or imported.

9. Market and Sell Used Cars

You can create premium accounts on websites that help market your products. Upload pictures of your car, along with its description, title, and set price.

Cost of Starting a Used Car Business

The cost of a used car business license in Dubai ranges from AED 25,000 to AED 26,000. Additionally, consider showroom costs, which vary depending on the location (whether in the main market or auto market). Also, account for the cost of purchasing cars, which you should have planned for when choosing your business structure.

Why Choose Cleritbiz for Your Business Setup in Dubai

If you research and plan well for your used car business in Dubai, you are likely to achieve significant growth. To get established information on setting up your used car business setup in Dubai, UAE, get a free consultation at Cleritbiz.

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