Used car prices ‘rise by 15%’

28 May 2015 11:20 PM

by Omar Obeidat |

AMMAN –– Government policies have become a common complaint for car traders, who charge that authorities are causing unprecedented confusion resulting in a slowdown in the local auto market.     

In addition, a decision that places a five-year age limit on cars entering the Kingdom and another raising the special tax on imported vehicles from 81 per cent of the value of the car to 90 per cent, traders complained in remarks to The Jordan Times that the latest decision to lift fuel subsidies two weeks ago has worsened “the already stagnant” auto market.   

Used car prices, which represent over 70 per cent of the automobile market, went up by at least 15 per cent due to these decisions, according to used-car dealers. 

Nabil Rumman, president of the Jordan Free Zone Investors Association, urged decision makers to reconsider the decision to limit the age of imported cars, calling for increasing it to 10 years, as the majority of Jordanians will not be able to afford the cost of such relatively new vehicles. 

As the price of 90-octane has risen by around 15 per cent, from JD0.70 a litre to JD0.80, on November 14 when the government decided to remove fuel subsidies, Rumman noted that motorists will face larger financial burdens and this will turn away many potential buyers. 

According to another trader, Qassem Samarneh, who owns a dealership in the free zone and showroom on the highway between Amman and Zarqa, demand for small-engine cars has increased after the fuel hikes, compared with the demand on medium- and large-engine vehicles just a few months ago. 

Samarneh noted that due to higher tax rates and the age limit on imported vehicles, many potential buyers will be looking to purchase used cars from individuals and not dealerships as such autos will disappear from showrooms in the coming few months. 

He agreed with Rumman in his estimation of the rise in prices of used cars.

“For example, the price of the Korean-made Hyundai Avante 2002 model, was JD7,500 around four months ago but now its price is around JD8,500,” he explained. 

Mohammad Zubi, from Mahran Zubi showroom in Amman, echoed Samarneh’s remarks that demand for small-engine motors is higher than on medium or large engine ones. 

However, he complained that there is a “severe” slowdown in the market due to government policies. 

Citing another reason pushing demand for cars down, Zubi said that banks prefer to reduce financing car purchases during the last two months of the year.  

According to Samarneh, currently, major buyers of new cars are taxi owners, private companies and rental car firms. 


In a bid to renew the fleet of cars on the Kingdom’s roads and to address the ballooning gasoline bill, the Cabinet on June 1 decided to reduce the tax on small-engine hybrid cars from 55 per cent to 25 per cent.

Moreover, authorities also decided to grant motorists who trade in cars that are 10 years old or more a further tax discount. They will only have to pay 12.5 per cent in special tax for hybrids while their old cars will be scrapped.

But Nadim Haddad, marketing and sales manager at the Central Trade and Auto Company, Toyota’s agent in Jordan, said although the government has reduced custom duties on hybrid vehicles to a certain extent, hybrid vehicles are still expensive for the majority of Jordanian buyers due to their initial high cost. 

“The initial cost of hybrid vehicles is still very high due to the high research and development costs of the actual technology. There is still room to reduce taxes on green cars further to make them more accessible,” Haddad elaborated.

Rumman agreed with Haddad that the current tax rate on imported hybrids is discouraging many from buying the fuel-efficient vehicles. 

According to official figures, more than 600 motorists have replaced their old cars with hybrids since the government decided to reduce taxes on fuel-efficient autos nearly five months ago.