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 Vehicle 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.

Vehicle Depreciation Percentages: A Closer Look

Standard Vehicles

YearDepreciation Percentage
First Year0%
Second Year5%
Third Year10%
Fourth Year15%
Fifth Year20%
Sixth Year and above30%

Taxis, Public Transport, and Rentals:

YearDepreciation Percentage
Last six months of the first year10%
Second Year20%
Third Year25%
Fourth Year30%
Fifth Year35%
Sixth Year and above40%

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.

About Author

Rahul Matiwadekar

About Author

Rahul brings more than 10 years of experience in the international banking, insurance, and finance industry, having worked in various roles from advisory to managerial positions. With his extensive knowledge and understanding of insurance, he is here to share his expertise and help you gain a better understanding of insurance products, processes, and more through his easy-to-understand blog posts.