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I’m looking to buy a new car and bung it on credit Dubai style. It’s a pretty competitive market and I don’t know where to start. I bank with Emirates Bank. I want to reserve the right to repay early. I’m happy to get free stuff. Has anyone done this recently and do they have any recommendations?

I just bought through Emirates bank. Our company banks there, so it was painless, did not even have to step foot in the bank. All I provided was a salary certificate and passport. They had the bank records of file, and all the other info. They filled out the pages of paperwork. All I did was sign 12 times and it was done.

I found they were very prompt and dedicated (redeemed themselves from the last disaster). The loan guy called me in minutes to tell me the loan was approved. If you bank with EBI, get a loan thru EBI, most banks won't give you a loan unless you move all your banking there anyway and it is a big hassle. The rate was 5% if I am not mistaken.

The salesman even got me a killer insurance rate with low deductible and had all the docs delivered. I basically went in once, picked out the vehicle, test drove it, made the deal, moved to another desk and gave them all the info, came back the next day and picked it up.

I bought my last buggy privately, and what a hassle that was! Never again. It took about 10 hours to complete the process, including RTA and all. It is worth it to me to save that time and have them do it.

I give top marks to the dealership I used, as well as the EBI guy...very pro.

What you failed to mention is that Emirates bank will charge you a ridiculous % if you want to pay the loan off early so effectively you can't sell the car or even upgrade to next years model through a dealership without paying this penalty.

Also, the 5% is not on a reducing balance, you will pay 5% of the whole loan value every year.

Also, mortgage style you are paying mainly interest at the beginning so after year 1 of a 5 year loan you are nowhere near paying off 1/5th of the car.

In my opinion you might be better off getting a personal loan and not a car loan.

Worth looking into.

Hey John,

The early repayment is 2%, so not too bad. The rate is low enough for me to hardly get noticed at month's end. I was really looking for something to drive for years to come, so this was not a major thing for me, although I did ask. They saved me so much time, I figured what is 2%, really. Personal loans are a way higher interest rate, but you can pay them off early, that would be a good option if you REALLY WILL pay it off early. If it is doubtful, I would opt for the car loan (a lot less hassles too, unless you live/work close to the bank). Some companies won't give a letter for unsecured loans more than 2 years as well.

I don't know what the % rate is on personal loan, but even if it's 10% you will not be losing out over a non-reducing balance 5% loan.

My biggest issue with car loans is the fact that after 1 year of a 5 year loan, I haven't paid off 1/5th of the loan. I would like to upgrade my car annually (so it is always new) and this is not financially viable with a car loan.

Horses for courses.