Every vehicle, from the moment it rolls out of the showroom, begins its journey of value reduction. This phenomenon, known as depreciation, plays a pivotal role in motor vehicle insurance claims in the UAE. Whether you own a taxi, a personal car, or a rental vehicle, understanding depreciation percentages can significantly impact your insurance claims. This article offers a comprehensive breakdown of these percentages for various vehicle types.
Why Understanding Depreciation is Crucial
Depreciation isn’t just a theoretical concept; it has tangible implications. When claiming insurance for damages, the claim amount is often influenced by the vehicle’s current market value, which is affected by depreciation. Thus, being aware of how much your vehicle has depreciated can set clear expectations for potential claim amounts.
Depreciation Percentages: A Closer Look
Standard Vehicles
| Year | Depreciation Percentage |
| First Year | 0% |
| Second Year | 5% |
| Third Year | 10% |
| Fourth Year | 15% |
| Fifth Year | 20% |
| Sixth Year and above | 30% |
Taxis, Public Transport, and Rentals:
| Year | Depreciation Percentage |
| Last six months of the first year | 10% |
| Second Year | 20% |
| Third Year | 25% |
| Fourth Year | 30% |
| Fifth Year | 35% |
| Sixth Year and above | 40% |
These tables provide a clear picture of how vehicles depreciate over time in the UAE. It’s evident that taxis, public transport, and rentals have a steeper depreciation curve, reflecting the intensive usage and wear and tear they undergo.
Conclusion: Steering Through Depreciation
While depreciation is an inevitable aspect of vehicle ownership, understanding its nuances can empower vehicle owners in the UAE. Whether you’re considering selling your vehicle, buying a used one, or navigating the complexities of an insurance claim, a clear grasp of depreciation percentages can steer you towards informed decisions.
