Law you need to know before selling your car in UAE

Law you need to know before selling your car in UAE

So you finally found the occupant who sold the car in the UAE. This sounds great, even though it is the first step in the long process required for a car resale. But do you have any knowledge of the laws related to the sale of used cars in the UAE?

Well for starters, do not place any signs, advertisements or sales materials/stickers that are to be sold in the window. Of course, you have seen it in Europe and around the world, but it is illegal in the UAE and may cause the police to seize your vehicle. When you are ready to sell a car, do not wash the car on the street. You may be fined 100 dirhams. You cannot sell cars in the UAE with any outstanding funds (collateral). All must be removed before the cars are sold.

Content Table

RTA and Buyer Needs

The seller needs to liquidate any outstanding funds (mortgage/loan). If they have liquidated the funds (mortgage/loan), their bank must notify the RTA to clear the loan from the RTA system. After the loan is cleared on the RTA system, the RTA sends a text message to the vehicle owner. This usually takes 24-48 hours.

For sellers, it’s best to pass their car through the RTA test before the ad is placed. This way, they can check for any problems and correct them before they are sold, because there is no valid test certificate to transfer the car to the new owner. The fee is AED 120. This certificate is valid for 30 days and can, therefore, be used at the place of transfer.

Not only is this a good sales feature, but it will also speed up processing during the registration process.

Sellers must be present at the place of transfer and require their UAE driving license or Emirates ID card (original no copy) and a valid test certificate.

It is also useful to check for any fines before selling the car to save on the impact of the transfer. You can do this through the excellent Dubai Police app (on iOS and Android) and the Dubai Police website.

The buyer needs the following items:

  1. Effective car insurance.
  2. Passport with a residence visa (if this is the first registration of the car).
  3. Emirates ID card.
  4. UAE driving license.
  5. The buyer needs all copies and originals above.

The buyer usually pays the vehicle test fee (120 AED) (or the seller’s fee if the seller has paid). The buyer also pays all registration fees (330 AED).

Please keep in mind that if the buyer obtains a visa from a different emirate and they want to register the car, they can register the car if you live and own the property or lease the property.

For example, if you want to register a car in Dubai (and you live in Dubai) but get a Fujairah visa, you will need to bring a certificate of ownership (if you own the property) or a copy of the rental contract and your current DEWA billing name.

Who can sell your car?

The seller must attend the RTA in person to transfer the car, but the third party can have several options to sell on their behalf. You can grant an individual power of attorney to act on your behalf. You will need to sort through the court, but it is time-consuming. Again, this authorization will apply to all of your business and is therefore not limited to the sale of your vehicle.

The easier way is to visit a car showroom that is authorized to write a sales agreement. The owner of the vehicle must be present and provide their original identity card, but this will give them the right to authorize others to sell the car on their behalf. This is useful if someone travels frequently or travels abroad for long periods.

Please keep in mind that the car must have no collateral (collateral) before arranging the sales agreement. Also at this point, any fines should be cleared.

Make sure you are the trustee or company of the sales agreement as they will legally be able to sell the car and earn revenue. It is recommended that you draft a letter stating that you are allowed to sell the car on your behalf, but the proceeds still belong to you. Some car showrooms will advertise on your behalf and sell your vehicle to receive commissions and consultants such as Expat Wheels.

Insurance Transfer

If you have 7 months or more remaining, you can transfer the policy. As long as the standards required by the insurance company are met, the insurance can be transferred to the new personnel.

Not all insurance companies offer the ability to transfer insurance, so please contact the company first. If the policy still has at least 7 months remaining, you can cancel the policy and get a refund at any time remaining. Usually, this is preferred and not transfer insurance. To cancel the policy, the insurance company will ask for proof that the car has been sold, so please get a copy of the new registration card from the new owner.

Loan transfer is not possible. The existing loan must be cleared in full and released at the RTA before a new loan can be issued against the car.

Selling a car with a loan?

If there is an outstanding loan on the vehicle and the seller has no financial status to liquidate the loan, it is still possible to sell the car. The best way is to let the buyer go to the bank with the seller and pay the outstanding funds in full and close the account. You will need to prepare a sales agreement stating that the buyer is liquidating the funds and both parties must sign. If the financing amount exceeds the agreed sales price, the seller will make up the difference at that time. If the funds are small, the buyer still provides the total sales amount to the seller. The bank should then be instructed to contact the RTA to release the loan on the RTA system. This usually takes 24-48 hours. When the vehicle is released from the RTA system, the owner will receive a text message from the RTA.

After leaving the bank, it is best to keep the vehicle in a safe location and the buyer should have all the keys and vehicle documentation until the seller receives the RTA release message. Buyers and sellers can then use RTA and transfer car ownership. Now that you know how to deal with rules, how to handle paperwork with confidence, how to deal with banks, they can help you stand on the right side of the law and make the otherwise fearful process easier than you fear.

Leave a Reply

Your email address will not be published. Required fields are marked *