For many expats, Dubai offers a perfect opportunity to buy a luxurious car they can only dream about buying back home. It is because the use of luxury cars is more common in Dubai than most parts of the world which make them easily available. It is kind of local culture here to drive luxurious cars encouraging expats to buy one for them.
When all new cars that are available for AED 300,000 and more are categorized as luxury cars, retail cost is not the only factor you have to look into. You also have to consider how much you have to pay an insurance premium which is often a hefty amount if you are buying a policy for a luxury car.
Here are some tips for car owners who are looking for car insurance for their luxury cars.
Which is Cheaper to insure? A New or Used Luxury Car
As soon as you buy a new luxury car and it leaves the showroom, it loses up to 30% of its value. This is why used cars are cheaper to insure if compared to new cars. One smart option for buyers is to buy a used car that is 2-3 years old.
These cars allow buyers to save on their premium even when they are still eligible for agency repairs. The rate of depreciation for new luxury cars is also faster so buying a used luxury car is often a smart financial move.
Is the Type of Luxury Cars affect Insurance Costs?
Yes, there is a significant difference in cost of insurance premiums based on the type of car. If you own a sports car also known as HPVs (high-performance vehicles), the insurance is expensive if compared to HVV brands (high-value vehicles). For example, if you own a sports car like Ferrari, you have to pay more insurance premium if you own a car from Bentley or Rolls Royce. The difference can be up to 40% on the premium.
Background Check Can Significantly Reduce the Insurance Cost on Used Luxury Cars
If you are buying a used car, check if the warranty is still valid which mostly lasts for three years or 100,000 km but also varies based on manufacturer.
Also look for service history as many manufacturers void the warranty if prescribed service schedule is not followed. Similarly, check GCC specs as these cars are cheaper to insure. You can learn about the details on RTA passing certificate.
Last but not the least, make sure to opt for comprehensive coverage instead of third party liability. With these tips in mind while buying a luxury car and finding an insurance plan, you can not only save on insurance plan but can also ensure the best value for your money which often comes with comprehensive coverage only.