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The first thing to understand is that a specific process must be followed, even with a private sale, for a UAE vehicle sale to be legal. There are penalties associated with any infractions of the rules. Those penalties range from fines to impoundment, depending on the violation.
Several laws govern a UAE's private sale.
One that often trips up sellers is the ban on any signs, advertisements, or sales literature, including stickers, placards, or descriptions placed on the outside of a vehicle or in the windows of a car. While this is common in other parts of the world, in the UAE, it is illegal.
Getting caught with a sign or sticker advertising a vehicle is for sale on the vehicle can cause an impoundment. It is the type of infraction that most police will not overlook. UAE laws on the matter are clear, and there is not much wiggle room.
Another action that can incur a fine is to wash it on the street. The best approach is to have the vehicle professionally cleaned if the sale is being privately managed. If the seller does not want to go that route, the vehicle must be washed privately, away from public view. This includes washing it in any driveway.
In addition, they must clear all loans and fines on the car before they can legally sell the vehicle. A sale cannot proceed, and a title cannot be transferred if there is an outstanding loan on the vehicle. If there is an outstanding loan on the car that the seller cannot cover, there are options:
If a vehicle is sold and has an outstanding loan attached to it, the sale is invalid until the loan is cleared. To be considered “cleared,” the payment in full must be updated in the Roads and Transport Authority(RTA) system before the sale can go through.
It is up to the seller to ensure the RTA is informed of any clearing of a loan. If a bank is involved, the seller should discuss how to inform the RTA of the loan being paid off.
Once alerted that a loan has cleared, the RTA will update its system. The organization will then inform the seller that the system has been updated and their vehicle is legally considered cleared from the loan. The clearance from the RTA usually takes about 48 hours to go through, and the text will notify the seller when it does.
Because of the RTA process, it is best for the seller to put their vehicle through an RTA test before any advertising is done. This way, if there are problems, the seller can resolve them before offering the vehicle for sale.
The ownership of the vehicle cannot be processed or transferred until the RTA has cleared the car.
Because of the rules associated with selling a vehicle in the UAE, many people look for alternatives to handling the sale themselves. This is often the case, even if nothing is owed on the car because of the restrictions on advertising.
One option is to sell their vehicle to a third-party enterprise, which includes clearing the car as part of their sales process. This third-party “buys” the vehicle from the owner who wants to sell and pays off any loans as part of the sale.
The benefit of this arrangement is that the group buying the vehicle sells in the UAE every day as part of their business. They know the laws and the market. They will assess the vehicle for sale and make an offer on it, and if the owner agrees, the third party will cover the cost of the loan and work it through the system.
From the seller's perspective, the benefits of this type of arrangement are:
Another benefit is that if the seller is also looking to buy another vehicle, that can be handled as part of the trade-in process.
What to Look For
With any third-party sale, the seller should insist on the following:
The process in the UAE, while strict, is straightforward. While it is not as simple as an individual deciding to “sell a car online” and throwing it up on the internet or driving around with signs in the vehicle window advertising it is for sale, compliance in the UAE is easy, even from a private sale perspective.
If the seller decides to go with a third-party vehicle sales organization, in that case, the compliance process is even easier and there is no paperwork to worry about beyond the sales agreement.