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Car Insurance

Car Insurance

How VAT Impacts You As A Car Owner In The UAE

AuthorCormac Moylan

Following the announcement of VAT implementation in the UAE, the sectors that will be subject to 5% per cent VAT include food and beverage, utility bills, hotel services, entertainment, electronics, cars and jewellery among others.

But How Does It Affect You As A Vehicle Owner in Dubai, Abu Dhabi and Other Emirates?

There will be a likely shift in consumer behaviour in 2018, away from new car purchases, for example a car originally costing AED 100,000 will be increased by a further 5000 AED. Unfortunately, renting a car won’t help you avoid VAT either.


The increase in price should lean towards an increase in personal loans, car loans, mortgages and credit cards. Remember, when you take out a loan for a new car, expect the financial charges from the bank to be high.

Car Insurance

As VAT is now applied to car insurance, you’ll be affected by higher premiums. Additionally, the Insurance Authority recently adjusted the minimum premium. Whether you have a new car or a used car, RSA Car Insurance will provide unique covers such as free taxi when you’re making a claim and free 24hr breakdown recovery service to support you as a vehicle owner.

Consumption Costs

Some good news, Salik recharge cards are exempt from VAT, as well as RTA parking fees.

Services and Repairs

Car maintenance has also become more expensive as VAT applies to the purchase of spare parts and even car washes.

5% may not seem like a lot, but with the cost of petrol rising too, it’s a heavy investment. The the majority of vehicle payments will now cost you more in general, so it’s essential you protect the investment you’ve made with adequate and comprehensive car insurance from RSA.

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