If you’re thinking about buying your first car or considering leasing, it’s important to know all the costs: registration, insurance, Salik tolls, fuel, parking, maintenance, and even fines. This way, you can budget properly and avoid any surprises.
Why a Car Matters in Dubai
Dubai is a big city, and while public transport is getting better, the metro and buses don’t reach every area or run at all hours. If you live far from the main metro line, having a car is almost a must for getting to work, running errands, or exploring the UAE.
Traffic can be tough during rush hour, and the heat is hard on cars. Having your own car gives you freedom, but it also means regular expenses. Here’s what I’ve learned from my own experience and the latest data.
Up‑Front Purchase & Financing Costs
Purchase Price and Depreciation
The price of a new car depends on make and model. Entry‑level sedans such as the Toyota Corolla start around AED 70k–80k, while SUVs or luxury cars can easily exceed AED 250k. Cars in Dubai depreciate quickly; experts estimate that 20%–30% of their value is lost in the first year. You might save by buying a certified pre‑owned (CPO) vehicle—YallaMotor notes that CPO cars offer manufacturer warranties at used‑car prices.
If you choose to finance, banks in Dubai typically require a 20% down payment, and car loans run for up to 5 years. Monthly installments for a mid-range sedan (AED 80k) are AED 1,200–1,500. For SUVs or luxury vehicles, expect AED 2,500–4,000+ per month.
The bank you choose matters more than most people realise. Interest rates, processing fees, standing instruction charges, and even how fast your loan is approved can vary significantly between banks. This is especially important for expats, where minimum salary requirements and account fees differ widely.
For a detailed comparison, see our guide on Best Bank Accounts for Expats in Dubai (2026 Guide), which breaks down which banks offer lower fees, better digital banking, and smoother car loan approvals.
Registration and Licensing Fees
New Vehicle Registration
Registering a car with Dubai’s Roads and Transport Authority (RTA) involves several fixed and variable costs. Have a look at the following fees.
| Basic registration fee | 420 | Standard for all vehicles |
| Transfer of ownership | 350 | For used cars only |
| Vehicle inspection | 170 | Mandatory safety check |
| Traffic file creation | 220 | One‑time fee for first‑time registrants |
| Knowledge & innovation fee | 20 | Government service charge |
| License plates | 35–4,500 | Standard plates cost about AED 35; special “gold” numbers can exceed AED 4,500 |
Annual Renewal
Renewing your registration is less expensive but still adds up. Standard renewals cost AED 380 (including the RTA service fee). If your car is more than three years old, you’ll need another AED 170 inspection. Optional courier delivery of the registration card costs AED 25, and delaying renewal beyond the 30‑day grace period incurs a penalty of AED 25 per month. You can complete the renewal on the RTA website or app to avoid long queues.
Parking Fees: Pay Attention to Zones
Dubai charges parking fees in most urban areas. The rates depend on the zone and time of day:
| Commercial zones (A & B) | AED 4/hr | AED 2/hr | AED 50/day |
| Residential zones (D–K) | AED 2/hr | AED 1/hr | AED 15/day |
| Premium zones (T & Z) | AED 8/hr | AED 4/hr | AED 100/day |
Frequent parkers can save money with monthly permits:
- Residential permit: AED 150–400 per month. You need proof of address.
- Commercial permit: AED 500–800 per month
- Mall parking: Many malls offer 2–4 hours free with purchase, then charge about AED 10–20 per additional hour
If your home or office has free parking, make the most of it. In busy spots like Downtown Dubai or Dubai Marina, paid parking can quickly add AED 200–400 to your monthly expenses.
Salik Toll System
Dubai’s road toll system, Salik, uses electronic gates on major highways. Each time you pass a gate, AED 4 is automatically deducted. There are eight gates across the city, including Al Barsha, Al Garhoud Bridge, Sheikh Zayed Road and Business Bay.
Key facts:
Account setup & top‑ups: You must purchase a Salik tag, then maintain a minimum balance. A minimum top‑up of AED 50 applies, and you will be fined AED 50 if your account runs out.
Monthly cost: If you commute daily across two toll gates, expect AED 100–250 per month
Saving strategies: Plan routes that avoid multiple tolls (e.g., using Al Khail Road instead of Sheikh Zayed Road) and combine errands to reduce crossings.
Insurance: Mandatory Coverage and Rising Premiums
Having insurance isn’t optional—UAE law requires at least third‑party liability coverage. Recent floods and rising repair costs have driven premiums up. According to Shory’s 2025 analysis, third‑party insurance ranges from AED 450–1,000 per year, while comprehensive insurance costs AED 1,200–5,000 annually.
Premiums depend on:
Car value: Insurers charge 1.25%–3.25% of the vehicle’s value. Luxury cars (at least AED 300k) pay around 2.75%.
Vehicle type: Annual premiums for sedans (1.6 L) average AED 1,200–1,600, SUVs (2.5 L) AED 1,800–2,700, and luxury vehicles (4.0 L) AED 4,000–7,500.
Driver age/experience: Young drivers under 25 or new licence holders pay 3–7% of the car’s value, as this age group accounts for 50% of road fatalities. New licence holders may face a 25% surcharge.
Claims history: Maintaining a clean record unlocks no‑claim bonuses of up to 30 %
Tips to lower your premium
- Compare quotes from multiple insurers rather than automatically renewing.
- Opt for higher deductibles if you’re a safe driver.
- Install telematics/usage‑based devices—insurers may reward low‑risk driving.
- Remove unnecessary add‑ons, such as off‑road coverage, if you never venture into the desert.
- Choose third‑party cover for older cars—policies start at around AED 630.
Fuel Costs and Consumption
Fuel prices in the UAE are regulated monthly. As of April 2025, the per‑litre prices were AED 2.46 for Special 95, AED 2.57 for Super 98 and AED 2.63 for diesel. These rates fluctuate but typically remain lower than in Europe or North America.
How much you’ll spend depends on your vehicle’s efficiency and the distance driven. YallaMotor estimates that a compact sedan achieving 12 km/l and travelling 1,500 km per month consumes AED 394 in fuel monthly.
An SUV that does 8 km/l over 2,000 km/month costs about AED 787. In my experience driving a mid‑sized sedan (~10 km/l), a typical month of commuting, errands and occasional weekend trips costs between AED 350–600, depending on AC usage and traffic.
Tips to save on fuel
- Choose fuel‑efficient models: Hybrids and compact cars cost less to run than V8 SUVs.
- Use fuel rewards apps: the ENOC and EPPCO apps offer 5–10% discounts.
- Plan trips and avoid idling: Combine errands and avoid peak traffic to reduce consumption.
Maintenance and Repair Costs
Dubai’s harsh climate accelerates wear and tear. Regular maintenance prevents breakdowns and helps retain resale value.
Routine Service Schedule
Oil change: Every 10,000 km; cost ranges from AED 80–800 depending on brand and engine size
Tire rotation: Every 15,000 km; costs AED 50–100
Brake inspection: Every 20,000 km; costs AED 100–200
Common Repairs
Routine maintenance won’t catch everything. Typical repair costs vary widely between economy and luxury cars.
| Battery replacement | AED 300–500 | AED 800–1,500 |
| Brake pad replacement | AED 200–400 | AED 600–1,200 |
| AC compressor repair | AED 500–800 | AED 1,500–3,000 |
Long‑Term Budgets
Routine maintenance costs of AED 200–500 every six months for most cars, and primary services cost AED 800–2,500 annually. High‑end SUVs and luxury cars can easily exceed AED 8k–15k per year, especially after the warranty expires. To manage cash flow, set aside AED 800–1,500 per month in a car expense fund.
Service intervals & climate impact
Due to Dubai’s heat and dusty conditions, many garages recommend servicing every 5,000–10,000 km. Sand can clog filters and accelerate brake wear, and imported parts and labour costs are higher than in cooler climates.
Traffic Fines and Compliance
Ignoring road rules can quickly inflate your budget. Common violations and fines include:
Speeding (20–30 km/h over the limit): AED 600 fine and one black point.
Parking in a disabled spot: AED 1,000 fine and six black points.
Expired registration: AED 500 per month until renewed.
Dubai uses a point system, accumulating 24 black points results in your licence being suspended. Fines also affect insurance premiums, so drive defensively and stay alert for speed cameras.
Examples: Annual Cost Breakdown by Car Type
How do these costs add up? Check out the below, the annual budgets for 2025:
| Category / Vehicle | 2023 Range Rover Sport | 2022 BMW 530i | 2021 Toyota Corolla 1.6L | 2022 Mercedes S63 Coupe |
| Vehicle Type | Luxury SUV | Premium Sedan | Economy Car | High-End Coupe |
| Registration & licensing | AED 4,000 | AED 380 | AED 350 | AED 4,380 |
| Insurance | AED 12,000 | AED 7,500 | AED 1,200 (third-party) | AED 15,000 |
| Fuel | AED 10,170 | AED 5,000 | AED 4,300 | AED 8,955 |
| Maintenance & repairs | AED 15,000 | AED 8,000 | AED 3,000 | AED 15,000 |
| Salik tolls | AED 2,000 | AED 2,000 | AED 2,000 | AED 2,000 |
| Parking | AED 6,000 | AED 4,000 | AED 3,000 | AED 6,000 |
| Total Annual Cost | AED 49,170 | AED 26,880 | AED 13,850 | AED 51,335 |
These numbers don’t include loan payments. As you can see, the yearly cost of owning a car goes up a lot with more expensive models.
Hidden and Optional Costs
Salik tag & account fees: Initial tag around AED 100. You might pay extra for replacement or additional tags for family cars.
Car washing & detailing: Standard washes cost AED 30–50, while complete detailing can exceed AED 200. Dust storms make frequent cleaning necessary.
Tinting and accessories: Legal window tinting (up to 50 %) costs AED 700–1,500. Dash cams, seat covers and ceramic coating add more.
Roadside assistance & extended warranty: Some insurers offer roadside assistance for AED 120 per year. Manufacturer extended warranties can cost AED 3,000–6,000, but can save you on future repairs.
Fines for toll violations: Failing to top up your Salik results in a AED 50 penalty.
Should You Buy, Lease, or Rent?
If you’re staying in Dubai short‑term (less than two years), monthly car rentals might be cheaper. Driver Car Rental notes that economy cars rent for AED 1,200–1,800 per month, SUVs for AED 2,500–3,500, and luxury cars for AED 4,000–8,000+. Rental packages include maintenance and basic insurance, so you only pay for fuel, Salik and any fines.
Leasing offers a middle ground; many companies include servicing and registration in a fixed monthly payment. Leasing is ideal if you want a new car every few years without the hassle of selling.
Buying makes sense for long‑term residents. You’ll have higher upfront costs (down payment, loan interest), but after five years, you’ll own the car and can drive without monthly payments beyond insurance and maintenance.
Smart Money‑Saving Strategies
Budget ahead: Set aside AED 800–1,500 per month in a car expense fund to cover maintenance and unexpected repairs.
Choose fuel‑efficient models or hybrids: Hybrids cost more to purchase but save on fuel, and they have fewer wear components thanks to regenerative braking. Use fuel and parking apps: Earn discounts and find cheaper parking spots; many malls offer free hours with purchase.
Drive responsibly: Avoid fines; a clean record not only prevents penalties but also lowers insurance premiums.
Compare insurance providers annually: Rates change; shopping around can save hundreds.
Consider used or CPO vehicles: You avoid rapid depreciation and still get warranty coverage.
Plan routes and time of day: Avoid congested roads to reduce fuel consumption and Salik tolls. Off‑peak travel also means easier parking.
Frequently Asked Questions
How much does it cost to register a car in Dubai for the first time?
Registration fees total about AED 420–900, depending on whether you need a new traffic file and a fancy plate. The basic registration is AED 420, vehicle inspection AED 170, traffic file creation AED 220 and knowledge fee AED 20
How much is car insurance in Dubai in 2025?
Third‑party insurance costs AED 450–1,000 per year, while comprehensive policies range from AED 1,200–5,000, roughly 1.25 %–3 % of your car’s value. Young drivers or those with new licences may pay surcharges of 25 % or more.
What are Salik toll fees, and how do I pay them?
Dubai’s eight Salik gates charge AED 4 per crossing. You must attach a Salik tag to your windscreen and maintain a minimum balance of AED 50. If your balance reaches zero, you incur a AED 50 penalty. Top up via the Salik or MPay apps, or at petrol stations.
How much should I budget for fuel each month?
At AED 2.46 per litre (Special 95) and average consumption of 10–12 km/l, most commuters driving 1,500–2,000 km per month will spend AED 350–800 on fuel. SUVs and performance cars with lower fuel efficiency can easily double this amount.
What are the most common traffic fines in Dubai?
Exceeding the speed limit by 20–30 km/h leads to a AED 600 fine and one black point, parking in a disabled bay incurs a AED 1,000 fine and six black points, and driving with an expired registration costs AED 500 per month. Accumulating 24 black points results in a licence suspension.
Is it cheaper to rent a car or buy one in Dubai?
For stays shorter than two years, renting can be cheaper because you avoid depreciation, loan interest and major maintenance. Economy cars rent for AED 1,200–1,800/month, SUVs AED 2,500–3,500, and luxury models AED 4,000–8,000+. If you plan to stay longer, buying (or leasing) becomes more cost‑effective over time.
Final Thoughts on The True Cost of Owning a Car in Dubai
Having a car in Dubai gives you freedom in a city designed for driving, but it also means regular costs. Registration, insurance, Salik, fuel, parking, and maintenance can add up fast—sometimes even more than your monthly loan payment. Running a luxury SUV or sports car can cost AED 40,000–50,000 a year, while a simple sedan like a Toyota Corolla might be around AED 14,000 (not counting loan payments).
My advice is to pick a car that fits your lifestyle and budget. Take care of it to avoid problems, drive safely, and check your insurance and loan options every so often. With a bit of planning, you can enjoy driving in Dubai without spending more than you need to.
