First-time car buyers may be confused in either purchasing a new or used car. With tons of financing options available, does it make sense to pick a new car over a grey import one?
Used Cars: These cars attract less duty hence are affordable to the majority of the working population. The boom of the middle class has led financing institutions like Saccos and banks to target this segment for growth.
New cars: attract high duty and taxes from the Government, hence the cost price is steep and subsequently locks out a huge chunk of the population.
That’s in comparison to lack of warranties when it comes to grey imports.
New Cars: If you intend to buy a new car from an authorized dealer, then you will definitely get a vehicle that is tropicalized from the factory and is able to cope with our road conditions.
Therefore, cars that are brought into the country do not require any form of modification, thus offer great savings to the owner.
Used cars: unfortunately, are sourced in developed countries where severity levels are low. This means that the car comes with a softer suspension system and high fuel grade systems, just but to name a few things.
New Cars: Most accredited lending institutions are able to give you up 100% finance to new car buyers, depending on credit rating and also the fact new cars come with a warranty. The risk is way lower than that of a used vehicle.
Used Cars: Asset finance institutions are weary of the grey import sector as it is a high-risk venture to them. Since grey imports lack warranties, it’s hard for them to offer customers a line of credit easily.
However, the growth of the insurance industry has made banks attract grey import buyers, insulating themselves from default by taking insurance over loans issued. This has led to competition between banks, enticing the consumer with asset finance packages that are hard to resist.
New Cars: All new vehicles come with a manufacturer guaranteed warranty on paintwork, mechanical and drivetrain of the vehicle. Should any issue arise in the form of a defective part in the operation of the vehicle, the dealer is obliged to sort that issue at no cost to the owner.
Used Cars: Grey imports brought into Kenya are about 7 years old, past their warranty mandate, if anything is to happen to the vehicle, the owner takes full liability and that is costly.
For example, certain Volkswagen models have transmission problems, when they arrive in Kenya. Unsuspecting customers buy these cars only to incur transmission issues later and they bear the cost of expensive repairs.