When it comes to car financing there are many options that are available in Kenya. Be it a car for personal use or a car for commercial purposes like uber business the options are many. Today we explore all the options that are available for you to be informed as you make your decision in regards to car loans and car financing .Below are the options available and the pros and cons of each one of them.
There are car dealers that have car finance options. You pay some agreed deposit amount and then continue with daily, monthly or quarterly installments as agreed. This option is specifically suitable for people or companies who need cars for commercial purposes like uber business. A good example is BK AUTOS Limited that gives cars to uber drivers with a minimum deposit of only 15% of the value of the car. The balance is then repaid in equal weekly installments starting from Ksh 7,000 depending with the car model chosen. This option is mostly for second hand cars imported from Japan.
The best part about this is the flexible requirements Autos Limited will only need your 12 month M-Pesa statement,your psv badge,ID,Certificate of good conduct and screen shorts of your earnings. The best part is also the initial cost are being borne by the company including comprehensive psv insuarance,installation of the tracker and alarm systems in the car, riveting and car identity as well as the cost of NTSA inspection. The downside of this model is that its only available for existing uber drivers with at least 1 year experience .
Kenya is a wash with micro finance companies .Most of them offer car loans for clients who meet their minimum criteria. They can finance you to buy a car or they can give you a loan with your car as the security meaning your car will be charged. The major downside of these companies is the interest rates, most of them charge an interest rate of 2.5% per month and above. They are also not flexible when it comes to repayment and should you skip repaying an installment you will be thoroughly harassed.
Almost all banks in Kenya offer car financing as long as the car you want meets a certain minimum criteria. They are also very strict with their requirements on the client. Your annual income should be above the cost of the car you are being finance and they can only finance you up to 70% of the value of the car. You should be able to provide them your bank statement as they will not consider to your M-Pesa statement. Your CRB rating should also be very good. The good side of banks is that they have favorable interest rates .The other advantage is that you can also be able to negotiate and restructure your loan should things change. The downside is the upfront cost you have to incur including the 30% to be paid directly to the dealer, comprehensive insuarance,valuation costs as well as installation of a tracker from their approved panel of suppliers.
Another option available for car financing is Saccos.You have to be a member of one for you to be able to enjoy this facility. Your total savings should also be sufficient for you to be financed. Most Saccos will loan you up to 3 times your savings. The good thing about Sacco is that the interest rate is favorable as compared to banks and micro finance .You can also be able renegotiate the repayment terms should things change.
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