The UAE Insurance Association has reported that authorized electric vehicle dealerships are declining to repair vehicles purchased from car exhibitions, stating that repairs or replacement of parts are only available for vehicles bought directly through their agencies.

This policy has raised concerns about its negative implications for insurance companies.

Mohammed Mazhar Hamada, Vice President of the Higher Technical Committee and Head of the Automobile Committee at the UAE Insurance Association, remarked that the pricing of car insurance policies in the market is achieving a state of balance.

Most companies have adjusted their prices equitably for both the insured and the companies, ensuring that customers receive good service while companies maintain fair prices reflecting repair costs.

Hamada pointed out a pressing issue involving authorized electric vehicle dealerships, particularly for Asian-manufactured vehicles.

These dealerships only provide repairs for cars purchased from them, which does not apply to those bought from licensed car exhibitions.

Car exhibitions are legal entities operating within the UAE and often offer electric vehicles at lower prices than those found at dealerships, which has driven consumer demand.

Hamada stated that it is unreasonable for dealerships to refuse repairs or parts sales for vehicles that are legally sold in the local market and supplement insurance companies' operations.

He cited complaints regarding practices from these dealerships, such as requiring substantial fees to open files or outright refusal of repairs, which adversely affects insurance companies when an accident occurs involving a vehicle purchased from an exhibition.

This predicament forces insured vehicle owners to shift blame onto the insurance companies and may lead them to declare the vehicle a total loss, even over minor repair costs.

Hamada highlighted disparities between dealership and exhibition prices for the same car models, noting that most Asian vehicles now have authorized dealerships in the UAE.

He emphasized the need to resolve this issue to protect both insurance companies and consumers seeking competitive prices at the time of vehicle purchase.

In cases where vehicles are refused repair services by dealerships, consumers often direct their frustration towards insurance companies, even for relatively low-cost repairs.

Hamada noted that insurance companies are responsible for covering parts costs, rather than supplying them, as their primary role is to provide insurance coverage.

As the electric vehicle market in the UAE experiences robust growth, there is an increasing consumer interest in these vehicles.

Insurance companies are fulfilling their roles in providing insurance and repair services, yet cooperation from authorized dealerships is imperative to ensure the provision of necessary parts for repairs, regardless of where the vehicle was purchased.

Khaled Al-Asal, Sales Manager for the GAC brand at Gargash Enterprises, confirmed that dealerships are legally bound to conduct maintenance and repairs only for vehicles sold through them, as this is tied to their responsibility to provide warranty and genuine parts.

Vehicles purchased from exhibitions or external sources are not covered by this warranty, thus the dealerships do not assume responsibility for their maintenance.

Al-Asal explained that this policy originates from the potential for imported vehicles to not conform to Gulf specifications or to harbor manufacturing defects.

Such scenarios can lead to technical or legal difficulties for dealerships if they service these vehicles, especially given the requirement to offer guarantees on their repairs, protecting their brand identity associated with vehicles they sell.

This situation is further complicated when it comes to electric vehicles that necessitate specialized technical expertise.

Mouhamed Imran, Sales and Operations Director at Elite Cars, noted that vehicles sold outside of authorized dealerships might still benefit from manufacturer warranties, provided coverage extends to the geographic area of the agency.

However, generally speaking, the obligations of the dealerships primarily rest with vehicles sold directly through them for maintenance and repair.

Ahmad Salah, a sales consultant at a dealership, stated that repair policies for vehicles acquired from external sources depend on the dealership’s stipulations and the specific condition of the vehicle.

However, it remains consistent that dealerships are typically obligated to service only the vehicles sold through them, alongside their accompanying warranties and parts availability.

Despite the restrictive policies, most vehicles that do not meet dealership criteria are typically repaired at external garages, where dealerships aim to maintain control over the sales of the brands they represent to ensure warranty advantages and after-sales service for their customers.