How Do Car Seller’s Agreements Work in the UAE?

2 min read

used cars for sale in Dubai, UAE

If you are in the market for used cars for sale in Dubai, UAE and thinking of buying a used car, be prepared because it can be a complicated and stressful process. In addition, you can expose yourself to scams if you are buying a car currently under financing. Seller’s agreement (also known as mubayaa or mobayaa) are a critical document in certain situations and can protect both buyers and sellers against scams. The experts at CarSwitch have put together this guide to help you with transfers in Dubai, Sharjah, Abu Dhabi as well as the other Emirates.

What is a seller’s agreement or mobayaa?

A seller’s agreement is relevant if you are buying a car which is currently financed however the seller doesn’t have the cash to clear the loan. In such situations, the buyer can clear the seller’s loan and use such an agreement to protect him or herself. Seller’s agreement is a legally binding document that enables the seller to authorize the buyer to transfer the car to her or his name once the loan is cleared. Clearing the loan typically takes 2-3 days and a seller’s agreement protects buyers and sellers against scams during the transition.

How should you use a seller’s agreement?

You can use the seller’s agreement effectively by following these steps:

  1. The seller and buyer should visit the RTA to get the car inspected to make sure that the car will pass the RTA inspection and there are no outstanding fines.
  2. They must then meet at the bank with a provider who can issue a seller’s agreement. Providers usually charge AED 500. CarSwitch can provide this service.
  3. After understanding the terms and conditions, the seller and buyer can sign the seller’s agreement.
  4. The buyer can now make a deposit at the bank to clear the loan while making sure that the amount is going towards clearing the loan against the specific car. It is crucial that the money goes directly to clear the loan and not in the seller’s bank account. If the money goes to the seller’s bank account then the seller can withdraw the cash and the buyer wouldn’t have much recourse.
  5. After the deposit has been made, the car and all related documents will belong to the buyer. The seller should get a copy of the seller’s agreement. It’s important to have this document because the seller may be held liable if the car gets into an accident before it is transferred to the buyer’s name.
  6. Banks usually clear the loan within 2-3 days and electronically inform the RTA.
  7. At this point, the buyer can go to the RTA and register the car under her or his name. The buyer should take long originals and copies of Emirates ID, driver’s license, passport, UAE residency and car insurance.

Without a proper seller’s agreement, the process can become very tricky for both buyers and sellers. For example, the seller can walk away with the cash and leave an outstanding loan against the car. On the other hand, the buyer might crash the car before it is transferred to her or his name. You can use a service like CarSwitch to manage the process for you.  Ready for a switchin’ experience? Sit back and browse through our switchin’ used cars for sale in Dubai, UAE. Happy shopping!