Buying a Car in Saudi Arabia

A lesser known fact is that not all cars can be owned by anyone in the Kingdom. Pick-up trucks are considered to be vehicles used for commercial purposes and are only allowed to be owned by Saudi nationals. Cars that hold more than five passengers are considered “family” vehicles and are only allowed to be owned by families. In fact, to buy a family car the buyer has to produce a letter from his employer that states his family affairs.

Petrol is as cheap as chips in Saudi Arabia so many expats do not take petrol consumption into account when buying a car in Saudi. Many opt for a 4x4 as it is conducive to desert driving; however, a sedan is perfectly fine for inner-city driving. When buying a car always take the tires into consideration, as the hot asphalt tends to increase the wear and tear on the tires. Furthermore always consider the cost of spare parts when buying a new or used car as some vehicle types will seem good value until they break down and parts become hellishly expensive.

Fahs: Also known as MVPI (Motor Vehicle Periodic Inspection), this is the vehicle test that proves roadworthiness. It is indicated by a circular sticker that is stuck on the car’s windshield.

Istimarah: This is the car registration card. The registration card has to be with the vehicle at all times and needs to be renewed every three years. The Istimarah will only be issued if the vehicle has passed the MVPI.

Exhibition: In Saudi Arabia all used car transfers must go through a third party, hence the buyer will hand his car and istimarah to the exhibition and you will deposit your money. The exhibition will hold both the money and the car until all the paperwork is completed and the transfer of ownership goes through.

Morot: This is the traffic police where the paperwork for the buying or selling of a used car is done.

When moving to a new country and spending money research is key. Always research the make of car that you want to buy, look at various forums and ask how the air conditioning is (this is very important) and if the car breaks down perpetually for some reason. Also research the cost of spare parts as this may sway your decision to buy a certain brand. It is also recommended that you research the insurance rates and premiums to ensure that you are aware of what you need and what you should negotiate for.

To buy a new car in Saudi Arabia it is always recommended that the buyer goes to a reputable car dealership. The dealership will show the full specs of the vehicle, and the buyer will have peace of mind that his vehicle really is new. Furthermore, the dealership, if it is a good one, will handle the process of vehicle registration, insurance and even the motor vehicle loan for you, however do not assume that this is the case and always ask the dealer to handle all the paperwork prior to concluding the sale. There will always be an English speaking salesman on hand to handle the queries of expat buyers.

Remember that when buying a new car you can still negotiate on the price and the package. Negotiation is common in the Middle East and it is not considered rude to ask for a better deal. Furthermore cars are sold at a discount during certain times of the year like Ramadan, for example. It is a good idea to find out when these sale times are as the discounts tend to be worth the wait.

Buying a used car always carries some risk, because the buyer does not know how the car was driven or maintained and whether it has been in an accident, and this is why it is best to be prepared. Here are some tips for those who are buying a used car:

Decide on your budget – do some research as to a realistic price of a second hand vehicle according to its age, model and make. There is no official guideline as to the prices of used cars so vehicles are sold at the market rate; hence research into the price of the car is very important.
A used car can be found at a showroom of a dealership, a car souq, or on one of the many websites advertising used cars. It is ill advised to buy a used car from a showroom or a car souq as the price may be hiked up and you will be paying more for the car than you would pay if you buy it from an individual.

Once you have found the car of your choice, especially if you have found it online, arrange to go see it. Cars do not rust in the Middle Eastern climate so they tend to look quite new on the surface, however upon closer examination there may be some damage – make sure that the car is properly checked by a mechanic, especially the under carriage. Take the car for a drive with the mechanic to in order to assess if the gears and engine are in good condition. Even though it may seem like a time consuming effort it is well worth checking the car out completely.

Avoid cars that are older than five years or that have a lot of mileage because these cars need more maintenance. Do not buy a car if the owner himself is not the sales man (in a private sale). Also cars with an accident history may need more maintenance and may be difficult to resell.

Always negotiate on the price no matter how reasonable it seems.

Finally, try and buy a car from someone who is selling it because they are leaving the Kingdom, not because they need to sell it.

There are a number of documents that are required when purchasing a car. The main ones are a letter from the Saudi sponsor or employer. Most employers are accustomed to such letters and know the correct format of them. If the company is not a government entity the letter must be attested by the Chamber of Commerce. If the vehicle is a family vehicle the letter must state the employee’s family status. Proof of insurance is also a must and must be shown when closing the deal.

When buying a used car you might have to process the paperwork at the Morot yourself, however some exhibitions will do this for a small fee. If you do the paperwork yourself there are a number of documents that need to be presented to the Morot. Ensure that all the documents are translated!

You will require the following documentation:

• a contract for the sale of the car
• a receipt for the deposited money
• the original Istimarah card from the seller
• the original Fahs from the seller
• the letter of permission from the al Morot
• copies of your (and your families) Iqamas
• driver’s license
• proof on insurance

Once you have submitted all your documents and if everything is in order then the Morot will issue you an Istimarah for the car in your name. You can claim the car from the exhibition with the new Istimarah.