Owning a sedan in the UAE is a popular choice for residents who value comfort, practicality, and performance. Sedans offer a great balance of affordability, luxury, and efficiency, making them ideal for daily commuting as well as long road trips. However, the overall cost of owning a sedan goes beyond just the purchase price. There are several factors to consider, such as fuel, insurance, maintenance, and depreciation. This blog provides an in-depth analysis of the costs associated with owning a sedan in the UAE, helping you make an informed decision before making a purchase. Entry-level cars under AED 80,000 are a popular choice.

1. Initial Purchase Price
The first and most obvious cost is the price of the vehicle itself. In the UAE, sedans are available across various price ranges, catering to different budgets. Entry-level sedans such as the Toyota Corolla or Honda Civic are lowest priced between AED 60,000 to AED 80,000 cars. For a mid-range sedan like the Nissan Altima or Mazda 6, you can expect to pay around AED 80,000 to AED 120,000. If you are interested in a premium sedan, such as the BMW 3 Series or Mercedes-Benz C-Class, they emerge as the best cars under AED 250,000.
Financing options such as car loans can help spread the cost of purchasing a sedan over time. In the UAE, banks offer car loans with interest rates ranging from 2 percent to 5 percent annually. You will also need to factor in a down payment of at least 20 percent of the car’s value, as mandated by UAE law.

2. Car Insurance Costs
Insurance is a mandatory expense when owning a car in the UAE. The cost of car insurance for sedans varies depending on factors such as the model of the car, the driver's age, driving history, and the type of coverage selected. Comprehensive insurance offers better protection and typically costs more than third-party insurance.
For an average sedan, insurance premiums typically range from AED 1,500 to AED 3,500 per year for comprehensive coverage. Premium sedans may require higher insurance costs, ranging from AED 4,000 to AED 8,000 annually. It is essential to shop around for insurance quotes from different providers to find the best rates.

3. Fuel Costs
Fuel is one of the recurring expenses for car owners, and the UAE benefits from relatively low petrol prices compared to other regions. In September 2024, petrol prices in the UAE averaged around AED 3.23 per liter for Special 95, which is widely used in sedans.
Most sedans offer decent fuel efficiency, with smaller sedans like the Honda Civic or Toyota Corolla delivering up to 16 to 18 km per liter, while larger or more powerful sedans like the BMW 5 Series or Audi A6 may provide around 10 to 12 km per liter.
For an average sedan owner driving 20,000 km per year, the annual fuel cost can range from AED 4,000 to AED 7,000, depending on the car's fuel efficiency and driving habits.

4. Maintenance and Servicing Costs
Routine maintenance is crucial for keeping your sedan in good working condition. The cost of maintenance varies depending on the make, model, and age of the vehicle. Most sedans come with a manufacturer's warranty that covers servicing for the first three to five years or a specified number of kilometers, typically 100,000 km.
Once the warranty expires, you will need to pay for services such as oil changes, brake pad replacements, and tire rotations. For a mid-range sedan, annual servicing costs can range from AED 1,000 to AED 3,000. Premium sedans may require more expensive maintenance, with yearly servicing costs ranging from AED 4,000 to AED 8,000.
Additionally, if you drive extensively or own an older car, unexpected repairs can add to the total cost of ownership. It is advisable to set aside a budget for such expenses to avoid financial surprises.

5. Registration and Licensing Fees
The UAE requires all vehicles to be registered annually, and this process involves paying certain fees. For a sedan, the annual registration renewal fee is typically around AED 450. You will also need to pay for vehicle testing, which costs around AED 150. If the car passes the test, the registration is renewed. Some models, especially older ones, may need more repairs to pass the inspection, adding to your costs.
Additionally, you may need to budget for Salik (toll) costs if you frequently drive through toll gates in Dubai or Abu Dhabi. Each Salik toll gate charges AED 4, and regular commuters may accumulate significant costs over time.

6. Depreciation
Depreciation is the loss in value of a vehicle over time and is one of the most significant costs of owning a car. Sedans typically depreciate at a rate of 10 percent to 20 percent annually, depending on the make and model. Entry-level sedans such as the Toyota Corolla or Honda Civic tend to have slower depreciation rates, while luxury sedans like the BMW 5 Series or Mercedes-Benz E-Class may lose value more quickly.
For instance, a sedan purchased for AED 80,000 may lose 15 percent of its value in the first year, leaving it worth around AED 68,000. After five years, the car could be worth as little as 40 percent to 50 percent of its original price. It is important to keep depreciation in mind when evaluating the total cost of ownership, as this will impact the car's resale value in the future.

7. Parking Costs
In cities like Dubai and Abu Dhabi, parking can add to the overall cost of ownership. If you live or work in areas with limited free parking, you may need to budget for paid parking. Public parking rates range from AED 2 to AED 5 per hour, while monthly parking passes can cost between AED 300 to AED 1,000 depending on the location. If you live in a residential area with dedicated parking, you might avoid these fees.

Conclusion
Owning a sedan in the UAE comes with various costs, ranging from the initial purchase price and insurance premiums to fuel, maintenance, and depreciation. By understanding these expenses, you can better plan your budget and make informed decisions when choosing the right sedan. While sedans remain a popular choice for their versatility and comfort, it is essential to factor in the total cost of ownership to ensure your vehicle remains affordable over time. Whether you opt for an entry-level or premium sedan, proper financial planning will help you enjoy your driving experience in the UAE without unnecessary financial strain.