Owning a car is slowly becoming a necessity, but the cost has, for years, locked many people out of this privilege. However, with the rising number of car loan companies, owning a car has quite become easier for those who are unable to make cash purchases.
Some of the companies that offer car loans include banks, Saccos, car dealers, and microfinance institutions. They have fees and procedures to repay and recuperate bad debts.
According to experts, Banks and Saccos serve as the best car finance option because of their flexibility. Saccos also have low-interest rates compared to other institutions making them ideal for people intending to purchase personal cars.
While many people have owned cars through microfinance institutions, some of these firms are accused of swindling millions from Kenyans through high-interest rates, hidden charges, and unnecessary additional charges.
That’s why first-time car buyers are advised to take their time to go through the terms and conditions to avoid losing both their money and the car. Many people opt to finance their cars through microfinance institutions because they process loans faster than other institutions.
To acquire car loans through these institutions, you need to provide the following documents;
- Application form
- Six months bank statement
- Copies of National ID and pin
- For used cars, copies of logbook and valuation reports would be needed
- Passport photograph
- Bank with the financial institution or have an account with them
- Copy of your payslip
- Sales Agreement
- Proof of a steady source of income
- For salaried workers, have your employer sign fees documents
What to check for before choosing a car loan company
- Interest rates
- repayment duration
- Financing amount
- Insurance covers or clauses
- Other attached fees and charges
Best financial methods for owning a car without falling into debt
Car Loan Companies in Kenya and the amount they offer
- Microfinance institutions
Below are some of the microfinance institutions offering car loans in Kenya. All the companies listed here offer loans of between Sh50,000 to Sh5 million, except Mwananchi Credit, which offers loans of up to Sh10 million. The repayment period is 48 months. The companies are;
- Mwananchi credit
- Mogo Kenya
- Jijenge credit
- Ngao Credit
- Northwave credit limited
- Rafiki microfinance
- Faulu microfinance
- SMEP microfinance bank.
- Car dealers
Most car dealers offer loans of between Sh500,000 and Sh20 million. They include:
- Maridady motors
- Toyota Kenya
- Toyotsu
- Autocheck
- Magari capital
- Motorshop Kenya
- Hakki Car Finance Kenya
