Taking a Car Loan

Seeing many young tenants driving nice cars like C200, E200, BMW X5 and so on most of which are on loan. I have been thinking about this and wondering if it is a good idea. Looking at a few random cars based on the prices at local yards below:

Car Market Price in Kenya Price of Importing
Mercedes C200 2.2M 1.7M
Rav4 2.2M 1.8M
Mercedes E200 2.7M 2.3M
Premio 1.5M 1.2M

If you take a car loan, most banks will insist that the car must be in Kenya. This means you are buying a car at a price that is already higher than the actual value of the car. The minimum inflated value of cars sold locally seems to be around 250k which is understandable because the yards are in business. When you buy a car locally, you are also paying for the rent for the yard, the salary for the sales man, and the profit for the businessman selling you the car. We can safely say that buying a local car that has landed from Japan you are already paying 20% on top of the actual value of the car. Is it advisable to add another 14% per year?

So for example if you take a 3 year bank loan at 14% for a C200 which is being sold at 2.2M. Let us assume you pay 20% cash and take a loan for 80%. Your loan is 1.76Million, interest you will pay for the 3 years in total is 739,000/=.

So in reality, for a car which is worth 1.7M you have paid 2.2M plus 739k = 2.9M basically, in 3 years, you will have paid 1.2 million more than the car, and this is before you add depreciation coz after 3 years your car value will be lower.

If you are planning on taking an expensive car on loan, think twice. It is better to pay for it in cash and import it yourself. Better yet, import a small cheap car and buy take a loan for a small apartment worth 2-3 million instead even if it is in an inconvenient place. Then after you finish the apartment loan, let the rent you are collecting pay for ur next car loan.

Kila nyani na starehe zake. Don’t stop living your life just because someone else thinks you should live differently!

hizo tu apartment za from 2 to 3m zinapatikana wapi nijipange

Ziko mob…Kings Serenity in Rongai, Tsavo.ke, za Centum real estate…ni vile watu huku hawapendi kutembea kwa ground but sai mtu akona 3M akona options kadhaa akitembea tembea.

Haha mnapenda kupangia pesa za watu sana. Hope you are not those “Siezi nunua gari nipark kwa gate ya landlord”

kama huna maoni ya maana rudi section ya sex and relationships, apo ndio umespecialize. Wacha hapa tuendelee na constructive debates.

Ni fiti kukua na gari, lakini maisha ni moss moss. Hakuna haja ya kuendesha gari zingine na bado hujapambana na school fees ya watoto mpaka Uni.


Take a personal loan and import the car. Asset finance is very expensive for a personal car.

Good idea as well. If you can avoid buying the car locally you make huge savings. Even auctions are abit cheaper than hizi kina SBT if one can get access to a reputable one.

Thank you for this wisdom. I have learnt something.

Do you realise you just made his point? Wewe unapenda nyumba na school fees, yeye anapenda gari wengine wanapenda pombe na wanawake. Live and let live.

Just the thread i needed.

Someone advise on the Mogo financing option. Their interest rate is 2.2% per month, on reducing balance. How does it compare with fixed interest rate of 14%?

here is their link>

Remember you run the risk of loosing the car if you default payments at anytime. So many have been recovered due to COVID.

Loan ni wewr sisi tunanunua na Cash pesa taslim and not everybody envisages owning an apartment in dingy Nairobi where sany Can visit anytime heri ni nunue 1-5 acres huko Ocha for same price of an apartment in Nairobi

I will come back. I find no problem in buying a car on loan if you can pay back. It’s a world of choice.

Sasa hutaki tudiscuss kwa sababu unapenda pombe na wanawake? That’s why nimesema unaeza enda section ya sex and relationships uchangie huko ama uanzishe post inaitwa “Wasting money on pombe na wanawake” ama “Live and let live”…alafu unaeza toa maoni hapo badala ya kutufanya tusome posts hazitusaidii. You can give your opinion on the topic or pia @administrator anaeza kuanzishia section inaitwa “Bad Investments” uchangie huko.

Run from them, with those rates, this is a shylock. Just deal with a bank. As @coolkip has said, you run the risk of defaults and that is what these shylocks who give car loan want you to do. Someone told me a certain shylocks can give a loan for a VX even if you pay 100k deposit knowing very well that the person will default after a few payments. immediately u defauly, the next day they take the car and put it up for the next person to come with a deposit and take a ridiculous loan and they keep keep repeating the cycle over and over. They want you to default and the contract says you never get your deposit or the money u had paid back.

fanya vile unataka lakini ujue watu wa kupeana loan ata kama ni bank gani wakuwanga jambazi mbaya.
Hao watu ya kusema hawawezi nunua gari waweke kwa landlord hawananga kitu chochote na hawananga mpango. mtu anasema hivi na kiatu hakuna, hiyo shamba hakuna, pesa hakuna, yaani hakuna chochote.
hiyo ya building family homes and fees and whatever is an okay thing but it’s like a woman driven agenda which is ofcourse dominant these days. Man is adventurous and hasn’t lived until he has served his own desires.

Kumanina zako.

Buying a car or any property on loan is usually a tricky thing…

Kaa ukijua sio yako, hadi the final payment is done…

It is even worse if the financing is not being done by a mainstream bank, hizo microfinance, shylocks, etc, wote ni wezi, legal thugs, in the event you default even once you loose the property or car plus any repayments made…

Why not save up, as if you have taken the loan, and buy the car cash?..

Shida tuko nayo generally as a people, watu hawana financial education. And I don’t mean degrees in finance