which according to you is the better way of financing a car ?
Savings full stop (.)
Repossession is a sad joke i’d rather not experience.
Try 50:50 split for business car and 70:30 for a personal vehicle.
If you cant go the bank and withrdaw enough cash to buy the car, you probably should rethink the idea of buying one.
Nunua gari vile utaweza uwache story mob. Hii maisha hainanga formula. Someone once told me never to be emotional around money. Look at money in whatever form as an enabler to your dreams. That is why rich people lazima utawapata na deni coz they reason akiwa na deni ya bank, it is the bank to worry but pesa take ikikaa kwa bank, he is the one to be worried were things to go belly up.
The problem with the loan is that you’ll pay more for the car (loan interest) than when cashed.
Now start another thread asking which is the best car with fuel economy, available spare parts and cheap to maintain
for example, you cannot have a salary of 30k and save to 500k to buy a car. saa hizo umework like 3-4 years non-stop. so next if you want land, utasave miaka kumi ununue land?
Mtu wa salary ya 30k hafai kuwa na ndoto ya kununua gari. Hiyo ni food, rent, clothes vitu kama 32inch TV, simu ya 15k etc.
Anyway, that’s on a light note but I wouldn’t encourage such a person to take a bank loan to buy a car
was just an example of showing that side of saving for someone whose salary is not that much and needs a car. A car can be a necessity even when salary is low. The danger now is maintenance, repairs etc
I believe there’s something for everyone, and you are right.
KJ2 Eccl 9:11:
“11 I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favor to men of skill; but time and chance happens to them all.”
CASH wins. Lets say you buy a car worth 1M via loan. You are required to put down maybe 30% and finance 70%. Means you borrow 700k say for 3 years at 14%. Total Interest=0.14x3x700k=294,000/=. After 3 years, your car will have lost value from depreciation and will be worth 700K and you will have spent 1.29M in total. You will have spent 1.29M and will have something worth 700K after only 3 years…you have lost a total of 594,000/=. Almost double the 300,000/= that someone who bought cash has lost.
Another thing to note is if you take a loan to buy a car, you are buying a car that is in Kenya which has been added markup of not less than 150K. Someone who buys cash can import that car that is being sold at 1M for around 850K.
The reality is that taking a car loan in Kenya for lets say 1M for a period of 3 years, you end up spending an extra 1M after 3 years in hidden costs compared to someone who imports the same car from Japan.
Many young people are in denial of this fact and they do not have the patience to save up for a car. When they get a little money they go for car loans which end up tying them down and preventing them from doing other progressive investments.
Say it again. In simple words, by loan you pay more for your car
Exactly, it is like paying Ksh. 2,000 bob to buy airtime worth Ksh. 1,000 bob. Car loan ni ujinga tu with the interest rates in Kenya. Buy a car you can afford in cash. Utafika tu mahali unaenda with your small affordable car.
Its fooolish to buy a car 100% cash in kenya, where theft, accidents and other unexplained misfortunes are they order of the day. A car is a tool, a depreciating asset and u will never sell it a profit ata kuende aje. Take that loan and keep yourself hungry for opportunities. U will never progress and think outside the box kama hutaki kuwa uncomfortable
My formula is 70% cash, balance after 4 months.
It does not matter as long as u have a clear plan of action on how to pay the rest of it. Mimi kama ingekua possible i could be taking even 100% finance. Let the bank/sacco worry about the car. Mimi kazi yangu ni kutafuta pesa
Chukua loan kama huwezi save the money to buy the car in one year.
hawa hawaoni hivo
What is more foolish is buying something worth 700k at 1.4M just because you cant save, which is exactly what a loan does. Theft, accidents and unexplained misfortunes are the reason why we have an insurance industry in Kenya. Whether you take a loan or buy cash, your car has insurance to cover for these risks. You cannot take third party insurance for a car on loan, so your argument is NULL AND VOID. In life, sht happens, you can lose your job, biashara can go up and down, covid happens…it is better to own your car instead of driving the banks car at the moment sht happens unless you are okay with auctioneers knocking on your door.
Agree with you all the way,time and chance happen to them all,