Legal Laws and Regulations for Buying & Selling Cars in UAE

Choosing the right time to sell a car depends on market demand, vehicle condition, and financial obligations. A car with pending loans or unpaid fines cannot be legally transferred. By understanding these laws, sellers can complete the process efficiently while protecting themselves from fraud or legal issues. Following the correct car sale procedures ensures a seamless transfer of ownership and compliance with the UAE regulations.

Keep in mind: Vehicles over three years old must pass an RTA inspection before sale.

*Above mentioned prices are for Honda City EX 1.5L, 2017 model.

Laws About Car Ownership Transfer

In the UAE, car ownership transfer follows strict regulations set by the Roads and Transport Authority (RTA). The seller must settle any outstanding fines or loans before initiating the process. Both the buyer and seller must provide:

✔️Valid Emirates IDs
✔️A vehicle registration card (Mulkiya)
✔️Car insurance

Vehicles older than three years require an RTA inspection. The transfer is completed at an RTA-approved center. This ensures a legal and smooth transaction.

Regulations to Sell Your Car in UAE

Many car sellers in the UAE often wonder about the regulations governing vehicle sales. To ensure a smooth process, it’s important to be aware of the key rules —

No ‘For Sale’ Signs: In the UAE, placing ‘for sale’ signs, stickers, or advertisements inside vehicle windows is strictly prohibited. Unlike in some European countries, where this is common, violating this rule can result in the car being impounded by the police
Outstanding Loans Must Be Cleared: Additionally, if a car has outstanding finance or a loan, the owner cannot sell it until the remaining balance is fully cleared. Before transferring ownership, all financial dues must be settled

Being informed of these regulations ensures a hassle-free sale process in the UAE.

Rules for Buyers, RTA, and Bank

Before selling a car in the UAE, the owner must clear any outstanding loan or mortgage
Once the payment is made, the bank informs the Roads and Transport Authority (RTA) to update the loan status
The RTA then sends an SMS notification to the owner, usually within 1-2 business days
To ensure a smooth sale, it is recommended that the owner get the vehicle tested by the RTA before listing it for sale
This test helps identify any faults and provides a valid car test certificate, which is mandatory for ownership transfer
The test costs AED 120 and remains valid for 30 days

Required Documents for the Buyer:

Valid Emirates ID (for vehicle insurance)
UAE driver’s licence (original and photocopies)

Fees to be Paid:

Vehicle test fee (AED 120) – If not already covered by the seller
Registration fee (AED 330)

Our Tip for You: If the buyer has a visa from another emirate, they must provide proof of property ownership or rental in their home emirate to complete the registration.

Seller Laws

The seller must be present at the Roads & Transport Authority (RTA) to transfer a car. However, a third party can sell the car on the seller’s behalf using a power of attorney (POA).

Selling Through Power of Attorney - The seller can authorise someone to handle the sale by legally issuing a power of attorney through the court. This document allows the authorized person to sell new or used cars in the UAE on behalf of the owner. Since a POA grants broader authority beyond car sales, it should be used with caution.
Selling Through an Auto Dealership - Another option is to visit an authorised auto dealership where the dealership can draft a sales agreement on the seller’s behalf. The car owner must be present with their original Emirates ID for this process.

Our Tip for You: Before selling, ensure the car is free from loans or fines to avoid delays.

Important Things to Know Before Car Ownership Transfer

Selling a car in the UAE may seem complicated, but with the right steps, it can be a smooth process. Here’s what you need to know to complete the sale safely and legally.

Be Cautious of Scams - Car sale fraud is becoming more common in the UAE. Stay updated on scam tactics and never accept personal cheques as payment to avoid financial risks
Gather Necessary Documents - To complete the car ownership transfer, you’ll need:
- Passport and Emirates ID
- Driver’s licence
- Vehicle registration card (Mulkiya)
- New insurance certificate
Transfer form - As the seller, you must also clear all outstanding traffic fines before the transfer. Keep a copy of the registration card as proof of sale
Follow Legal Advertising Rules - Posting "For Sale" signs on car windows is illegal in the UAE and can result in vehicle confiscation.
Transfer Registration and Insurance - Once sold, cancel your insurance so the new owner can register the car under their name. Many online platforms allow buyers to compare insurance rates from different providers

Car Sale Procedure in UAE

Selling a car in the UAE involves a clear, legal process to ensure a smooth and legitimate transaction. From gathering documents to settling fines and completing the ownership transfer through the Roads and Transport Authority (RTA), every step must be followed carefully.

Required Documents for Ownership Transfer

For legal car ownership transfer, both the buyer and seller must present the necessary documents:

Emirates ID: Both parties need to provide their original Emirates IDs
Vehicle Registration Card (Mulkiya): Proof of ownership, required for transfer
Car Insurance: The buyer must have valid insurance before the ownership transfer
Loan Clearance Certificate: If the car is under finance, the seller must settle the loan and obtain a clearance certificate
Vehicle Test Certificate: Cars over three years old must pass an RTA inspection before transfer

How to Organise Your before Starting the Car Sale Procedure?

Before selling your car, take care of a few important tasks to ensure a hassle-free car ownership transfer. Follow this checklist for a smooth transaction —

Remove the Salik Tag - Salik is an electronic toll system in the UAE, and your car must have a Salik tag to pass through toll gates. Before selling your vehicle, remove the Salik sticker to avoid unauthorised toll deductions from your account
Clear Outstanding Fines and Loans - Settle any unpaid traffic fines for speeding, parking violations, or other penalties. If your car was financed, pay off any outstanding loans before selling, as the RTA will not approve the car ownership transfer until the debt is cleared
Get an RTA Vehicle Inspection - An RTA vehicle test is mandatory before selling. If your car has worn-out brakes or tires, it may fail the inspection. Check for necessary repairs and get them fixed to ensure a smooth transfer
Manage Your Car Insurance - Before selling, either cancel or transfer your car insurance. If at least seven months remain on the policy, you can transfer the insurance. If not, you may request a refund for the unused period
Clean and Maintain Your Car - A well-maintained car attracts better offers. Get a professional cleaning and servicing to improve fuel efficiency, mileage, and resale value

Steps in the Car Sale Procedure at RTA

Vehicle Testing: If required, conduct an RTA inspection to ensure roadworthiness
Pay Outstanding Fines: Clear any unpaid traffic fines via the RTA portal or an RTA service center
Loan Clearance: If applicable, settle any outstanding loans before transfer
Car Ownership Transfer: The Buyer and seller visit the RTA or an authorised service center to submit documents. The buyer pays transfer fees, and a new Mulkiya is issued under their name

Settling Fines and Financial Dues

Before completing the car sale procedure, the seller must ensure –

All traffic fines are paid—these can be checked on the RTA website or Dubai Police app
Salik toll dues are cleared, as unpaid tolls can delay the transfer
Loan clearance is obtained, which may take a few days to process

Finalising the Sale

Once the ownership transfer is complete –

Cancel the seller’s insurance to avoid extra charges
The buyer receives a new Mulkiya, proving legal ownership
Hand over service records to the buyer (optional but beneficial)
Issue a bill of sale as additional proof of the transaction

Following these steps ensures a hassle-free car sale procedure in the UAE, protecting both the buyer and seller throughout the process.

Things to Know about Car Sale Procedure

The following are some things to be aware of before getting into the car sale procedure. This includes an array of things, including paying debts, understanding the used car market and more. Here are the things to know about the car sale procedure:

Tip1: Research the Market – Before listing your car, research similar models based on year, make, and condition. Understanding the market value helps set a competitive price, especially when selling privately.
Tip2: Consider Selling to a Dealership – If you need a quick sale with minimal hassle, selling to a dealership is a great option. Many dealerships offer market-value pricing and even allow trade-ins, making it easier to upgrade to a newer model.
Tip3: Maintain Your Car’s Condition – A well-maintained car attracts more buyers. Invest in a professional cleaning service and minor cosmetic fixes before listing your vehicle. Even small scratches or worn-out floor mats can impact its value.
Tip4: Keep a Complete Service History – A complete service history increases buyer confidence. Ensure you have all service records, invoices, and maintenance logs available to present to potential buyers. Gaps in records can deter interested buyers.
Tip5:Clear Outstanding Loans – A car cannot be sold privately in the UAE if it has an unpaid loan. Before initiating the car ownership transfer, obtain a loan clearance certificate from your bank and ensure all financial obligations are settled.

By keeping these tips in mind, you can ensure a seamless car ownership transfer while maximising your car’s resale value.

Buy the Best Car Insurance in UAE: Buyer’s POV

To register a used car in the UAE, you must have insurance. Once you purchase a vehicle, choose the best motor insurance plan from Policybazaar.ae and complete the registration process. We offer a range of affordable used car insurance plans for various models.For all your car insurance needs, trust Policybazaar.ae. Get your policy now!

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