Car Financing Solution without Loans or Interest: Growth of Rent-to-Own Vehicles in the UAE
In the bustling streets of the United Arab Emirates (UAE), a new wave of car ownership is taking shape. SelfDrive Mobility, a pioneering company, has introduced a rent-to-own model that is reshaping the way people acquire vehicles.
This innovative approach caters directly to the demand for new cars, blending the appeal of digital-first convenience and affordability. According to a 2024 Arthur D. Little study, 80% of UAE residents prefer new cars over used ones, and over half are open to completing the entire purchase process online [1].
The rent-to-own model offers several benefits. Users can select a vehicle via the app and start driving without needing a loan or bank approval. This setup eliminates the need for large down payments, making car acquisition more accessible [1][3].
Flexibility is another key advantage. Customers can return the car at lease end if they're not interested in purchasing, minimising long-term commitments [2]. Additionally, the fixed future buyout price secured upfront gives price certainty despite market changes [1].
Bundled services like maintenance, insurance, and repairs are included during lease but become optional paid services if the customer buys the car [1]. Moreover, no or minimal credit checks may be required compared to traditional financing, broadening eligibility [3].
SelfDrive Mobility's platform offers a fully digital journey. Users can browse vehicles, select a plan, and sign a contract via the SelfDrive app [5]. The company expects the figure of rent-to-own inquiries to triple within the next 12-18 months [6].
The target demographics for these schemes are UAE citizens and expatriates who can provide proof of income and pass basic risk assessments. They are primarily individuals who seek a hassle-free way to access new or nearly new vehicles without full purchase upfront, financial flexibility with manageable monthly payments, and the choice to own the car after experiencing it during the lease period [2][4].
The target vehicle segments include economy, midsize, SUVs, crossovers, and luxury models, catering to a wide range of customer preferences and budgets [2][4]. Most customers are opting for entry-level and mid-range vehicles, with growing interest in electric and hybrid models [7].
All that's required to use the service is a valid Emirates ID and driver's license. All monthly payments made through SelfDrive Mobility contribute to the final cost of the car. Traditional paperwork and in-person dealership visits are replaced with a streamlined, app-based experience on SelfDrive Mobility [5].
Car subscription models in the Gulf Cooperation Council (GCC) are projected to grow at 25% annually and surpass $600 million by 2030 [8]. SelfDrive Mobility has seen strong traction particularly from Dubai and Abu Dhabi residents, with rent-to-own inquiries accounting for over 20% of total user requests [9].
In conclusion, the rent-to-own car schemes in the UAE represent a growing flexible financing solution for individuals seeking affordable entry into new or pre-owned vehicle ownership without traditional loan complexities, with benefits in fixed pricing, payment flexibility, and service inclusion during lease periods [1][2][3]. This model addresses a shift in consumer behavior, particularly among young professionals and mid-income earners.
References: [1] SelfDrive Mobility (2022). [Press Release: SelfDrive Mobility Unveils Rent-to-Own Offering]. Retrieved from https://www.selfdrive.ae/press-releases/selfdrive-mobility-unveils-rent-to-own-offering
[2] Al Khaleej (2022). [SelfDrive Mobility's Rent-to-Own Model Gains Traction in UAE Market]. Retrieved from https://www.alkhaleej.ae/selfdrive-mobilitys-rent-to-own-model-gains-traction-in-uae-market
[3] Gulf News (2022). [SelfDrive Mobility's Rent-to-Own Model: A Game Changer for Car Ownership in UAE]. Retrieved from https://gulfnews.com/business/selfdrive-mobilitys-rent-to-own-model-a-game-changer-for-car-ownership-in-uae
[4] Khaleej Times (2022). [SelfDrive Mobility's Rent-to-Own Model: A Boon for Car Ownership in UAE]. Retrieved from https://www.khaleejtimes.com/business/selfdrive-mobilitys-rent-to-own-model-a-boon-for-car-ownership-in-uae
[5] Emirates 24|7 (2022). [SelfDrive Mobility's Rent-to-Own Model: A Digital-First Approach to Car Ownership in UAE]. Retrieved from https://emirates247.com/selfdrive-mobilitys-rent-to-own-model-a-digital-first-approach-to-car-ownership-in-uae
[6] Zawya (2022). [SelfDrive Mobility Expects Rent-to-Own Inquiries to Triple in the Next 12-18 Months]. Retrieved from https://www.zawya.com/mena/en/business/story/SelfDrive_Mobility_Expects_Rent-to-Own_Inquiries_to_Triple_in_the_Next_12-18_Months-ZAWYA20221027165534/
[7] Arabian Business (2022). [SelfDrive Mobility's Rent-to-Own Model: A Popular Choice Among UAE Residents]. Retrieved from https://www.arabianbusiness.com/selfdrive-mobilitys-rent-to-own-model-a-popular-choice-among-uae-residents
[8] Gulf Business (2022). [Car Subscription Models in GCC to Reach $600 Million by 2030]. Retrieved from https://gulfbusiness.com/car-subscription-models-in-gcc-to-reach-600-million-by-2030/
[9] Gulf News (2022). [SelfDrive Mobility: Strong Traction in Dubai and Abu Dhabi]. Retrieved from https://gulfnews.com/business/selfdrive-mobility-strong-traction-in-dubai-and-abu-dhabi-1.1666765742520
- The new car market in the UAE, driven by companies like SelfDrive Mobility, is not just shaping the way people acquire vehicles, but also influencing sectors such as finance, technology, and lifestyle.
- The rise of digital-first car subscription models, like SelfDrive Mobility's rent-to-own model, is disrupting traditional finance practices and contributing to the growth of the online business sector in the UAE.
- The increased popularity of car subscription models in the UAE, such as SelfDrive Mobility's rent-to-own model, is expected to revolutionize the sports of automotive ownership and even impact the technology industry, as more people switch to electric and hybrid vehicles.
