UAE used-car glossary

VAT on Cars (UAE)

Also known as car VAT, 5% VAT.

The UAE applies 5% value-added tax (VAT) on new cars sold by dealers, and on used cars sold by VAT-registered dealers. Private-party used-car sales between individuals are VAT-exempt. When valuing a used car for trade-in, the dealer's offer typically excludes VAT, so add the 5% back before comparing to a private-party sale price.

Related terms

Fair Market Value (FMV)
Fair market value is the price a willing buyer and willing seller would agree on for a vehicle in an open market, with neither party under pressure.
Asking-to-Sold Ratio
The asking-to-sold ratio is the fraction of the listed price that a car actually sells for.

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