Dubai-based automotive data company AlgoDriven has reported that average vehicle depreciation in the UAE reached 14.8% in 2023, a far steeper drop than the 2.5% recorded in 2022. The falling prices are a reflection of an increase in new inventory production post Covid, causing the used-car market to slow down.
AlgoDriven also revealed the average number of days it took to sell a car in the market decreased as the year went on, with it taking 19 days to sell a used car in December 2023, almost half the time it took at the start of the year.
It predicts that 2024 will see depreciation continue to hit the used-car market, forecasting a further drop of 15%. However, the company doesn’t expect prices to fall as low as pre-Covid levels.
The UAE’s used-car market is set to experience some positives in 2024, added the company, with a significant rise in immigration due to the country’s growing reputation as a business and financial hub, leading to an increase in activity in the market.
It also predicts the electric vehicle (EV) market to rise considerably, with sales of EVs in 2023 having jumped by 250% year on year.
Co-founder Glenn Harwood stated, “We are seeing a reversion to the long-term mean of used-car depreciation, as the after-effects of Covid slowly dissipate, with new-car options increasing and bringing discounts to the customer. 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.”
Founded in 2017, AlgoDriven also operates in Australia and Egypt, providing a range of services including market and data insights and a suite of products for vehicle-specific data, appraisal, evaluation, inspections and more. Its products are used in over 14 countries to value over $15 billion worth of cars annually.