Buying a used car in Saudi Arabia

For those who prefer a used vehicle, there are many options. Used cars can be found at dealers, at one of the many car souks, or on various websites that cater to expats and nationals. Many expats believe that buying from another expat will ensure that the car will have been kept in better condition, as expats are said to have higher maintenance standards than nationals. However, some expats may take advantage of this and charge more than the used car is worth.

For this reason, and due to the fact that there is always a risk involved when buying a used car in any country, expats should negotiate with the used car seller so that the vehicle can be brought to a mechanic of your choice who will do a physical inspection and a computerised test. It is important to find a trustworthy, competent mechanic in any country, and even more so with the harsh elements in KSA; both natural and man-made. Ask friends and colleagues for referrals.

Saudi Arabia does not have a “Blue Book”, or standardised way of calculating car value; thus vehicles go at the market rate. It is recommended that buyers search the Internet for the car that they are interested in buying so they get an idea of a base asking price. Again, all things are up for negotiation and you should apply this to used-car buying. If you do not speak Arabic, take someone with you who can negotiate on your behalf.

Keep in mind that in an arid climate like KSA, cars do not rust with age and their bodies can be shiny and new-looking. However, the heat takes its toll on the less visible parts, like gaskets, hoses and belts. Always have your mechanic check these.

Ask to see maintenance records. Anyone who’s bought a used car knows that being able to prove that it has been well maintained is a key buying factor. A seller knows this as well. Be leery of anyone who can’t back up their claims with paperwork! Regular oil and fluid changes are essential.

Renting a car in Saudi Arabia

For those expats unsure of how long they will be living in the Kingdom, or for those who prefer not to purchase a vehicle, there is always the option to rent a car. Car rental companies are plentiful and one can rent anything from a 2-door economy car to a Hummer. Car rental companies work on a daily, a weekly, and a monthly basis. All prices should include mandatory car insurance. As always, read this policy carefully to see what your liabilities are if you are involved in an accident.

Factors for thought when car buying

Expats will be hard-pressed to find cheaper petrol anywhere else in the world. It follows that a car’s gas mileage is less a factor than in other locations when deciding on what make and model to purchase in the KSA.

A proper 4x4 is a good idea if you are interested in exploring the desert, as standard sedans and cars do not have the ground clearance to go over rocks or the power to drive in the sand. Any type of sedan is suitable for city driving, providing it has good tires and, as always, good safety features.

Buyers should also consider the price of repair parts and their accessibility. American, British and German made cars typically have higher priced parts and are not as readily available if a part needs to be replaced, meaning potentially longer waiting periods. Japanese cars may or may not have high priced parts depending on the brand, but are thought to be more reliable and parts more readily available here in the Kingdom. Some Korean car companies have well established dealerships and parts should be readily available.

Car insurance in Saudi Arabia

Car insurance is mandatory in KSA, and comes in two basic forms. You will need one of these before finalising your purchase.

• Third Party Insurance

  The mandatory insurance (also referred to as Third Party Insurance) covers the damage you cause to other people, property, etc. but no repairs to you or your vehicle. In 2010, Third Party Insurance was very reasonably priced, at 350 SAR per year. Do note that different companies offer different amounts of coverage for this price, thus it is best to shop around.

  Comprehensive Insurance

  Comprehensive insurance covers everything, including your vehicle if there is any damage. Each company offers their own products and prices, so it is advisable to consider the options and to ask friends and colleagues for referrals - especially those who have had to use it.

Remember that a traffic accident can often find both parties in the traffic jail until the dispute is resolved…not a good time to find that your insurance company doesn't pick up the phone on the weekend!

Furthermore, for car insurance purposes, Comprehensive Insurance can only be purchased for cars 10 years old or newer; thus expats ready to entertain the idea of an ancient junker should put their fantasy on the shelf or at least know that only Third Party Insurance will be an option.

Where should I buy a car?

For new cars, it is best to go to a dealer. Dealers have sales during certain times of the year (like Ramadan) and can often assist in arranging a loan/lease.

Although used cars can be purchased at a dealership or at one of the car souks, the best deals can be had through private owners. Expatriates.com is a popular site used to search for used cars, as it is in English. For those who can read Arabic (or who have a friend or colleague who is willing to help), you can also use Mstaml.com.

Please be aware that many people may try to take advantage of newly arrived expats by selling their used car at an extremely high rate.

Many expats will leave before they’ve paid off their finance agreement and you may be able to simply take over the payments. It often sounds like a good deal, but remember that you are paying a new car rate for a vehicle that has already been used for a year or two. Ask if there is a balloon payment at the end and be cautious if the seller wants money to cover their deposit.

These can be good deals or a hassle. Keep in mind that the seller has had the best year or two of the car’s life while it was brand new.

Documents required when buying a car

When purchasing a new vehicle, one would hope that the dealership would be active in taking care of the paper work and going through the procedures for you. That is, after all, one of the benefits of buying new. However, don’t assume anything and get the dealer to commit to this while you still have the upper hand: before you buy!

In order to buy a car as an expat there a number of formal documents required.

(经实验证实沒有以下这个要求, 2012-03-20)
Expats must have a letter from their sponsor/employer giving permission that the purchase can be made. Most companies are used to writing such letters and know the proper format that must be used (e.g., stamps required, Iqama number must be referenced, along with title of position, and that the letter must be in English and Arabic). If the employer is not a government organization (e.g., Ministry of Health), then the letter must be attested by the Chamber of Commerce.

To purchase a family vehicle ( a car that accommodates more than five people) the letter must state that the buyer has family status as indicated on the Iqama and needs a family vehicle. Copies of all family members' Iqamas are required to buy a family car. Any permission letters (properly stamped) along with the copies of you and your family’s Iqamas, plus a copy of your valid Saudi driver’s license, must be taken to the local traffic police. They will return to you a letter that gives you permission to buy the vehicle you want. This should be taken with you to the exhibition.

Proof of insurance must be obtained and shown at the closing of the deal. You can look for your own company (many expats like Tawania insurance); however, car dealerships and car exhibitions can often help you with obtaining car insurance

An exhibition will then play an important (or not so) role in your purchase. It is law in the Kingdom that all used car transfers go through a third party, the exhibition. The seller will deposit the car and its Istimarah, and you will deposit your money. Both will be held here until the title transfer paperwork is completed, either by you or by the exhibition. If you are lucky, the exhibition will take a fee for moving paper and doing the legwork at the local morot and you will need only to wait a day or so until the transfer is complete.

If you have to do the work on your own, you must take the following back to the Morot:

• a contract for the sale of the car
• a receipt for the deposited money
• the original Istimarah card from the seller
• the original Fahs from the seller
• the letter of permission from the Morot
• copies of your (and your families) Iqamas
• driver’s license
• proof on insurance

You may not need copies of the Iqamas, or driver’s license; then again, maybe you will. Better to be prepared than be turned away and having to return later. It is a good idea to take copies of all these documents.

Make sure that everything is translated, and translated properly! If you have friend who can speak Arabic and accompany you, all the better. If you are successful, you will emerge with a new Istimarah with your name on it. The car is now yours as far as the morot is concerned. Take this back to the exhibition and claim your vehicle!

There are of course fees to be paid along the way. At the time of our buying, it cost approximately 75 SAR for the transfer of Istimarah and 100 SAR base fee to the exhibition.

One thing is certain, and that is the unpredictability of the system. Every person will have a different story or a slightly different procedure for obtaining their car. It is best to ask around, depending on your circumstance and area.