1. Growing Digital Advancements and an increasing number of Finance Aggregators are driving UAE Auto Finance Industry
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57 million passenger cars are produced worldwide. Avg price per new car in FY21 is 25,000 USD. The industry is increasingly moving towards newer technology such as AI and ML to improve efficiency. A large number of people in the UAE are now preferring privately hired cars, leading to a potential increase in their financing in future. The UAE government is taking several positive steps to lessen the time taken in the approval process for loans in the market so as to provide consumers with convenient credits. Nearly 60% of UAE Consumers are planning to buy an affordable car in the near future.
2. Sales of vehicles dropped sharply in 2020 owing to the COVID-19 pandemic but ramped up in 2021 due to consumers preferring personal vehicles
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Before COVID-19, not a lot of UAE residents preferred personal vehicles. But with the outbreak of the pandemic, this proportion increased by a huge margin.
Non-performing loans also surged as consumers and businesses were unable to make loan/lease payments. A relatively larger number of people opted for deferred loan repayment Government Schemes. Car dealerships are expected to increasingly bring the experience of car shopping online in a range of ways such as providing digital showrooms as well as e-finance.
3. Lenders need to Re-imagine the Auto Lending Lifecycle to compete and succeed in the new digital era
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Customers have grown accustomed to digital information in other industries, such as telecom and banking products, and now they have also started their automotive buying journeys online. Everyone wants a quick and easy financing process and control over the experience, with the ability to search for specific monthly payments, get pre-approved online, and opt for electronic contracting. Today’s shoppers view an auto loan or lease simply as a method of payment and an automotive vehicle is a key product they are actually focused on. This is due to the ease in the process like cross-comparison of different available options, reduced legal formalities, etc.