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Thursday, February 27, 2020

How Maridady Motors offers vehicle financing to car buyers

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There are some car dealers in Kenya who offer customers vehicle-import financing. Maridady Motors is one of these. The vehicle seller sells new and used vehicles and is located on Kiambu Road — have changed marketing tactics to offer clients vehicle-import-financing.

Maridady Motors gets financing from a bank on behalf of clients and imports vehicles for them.

“Given that market prices of popular vehicle models are common knowledge, we use the average of the value of vehicles that we already have in our showroom.

“If a client wants to import a 2012 Nissan X-Trail which goes for about Sh1.85 million but does not have enough money, we issue an import quotation for the amount detailing specifications of the car to be imported to secure a bank loan.

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“Upon getting an approval, our partners in Japan will, on strength of the bank’s offer, ship the vehicle to us. Once it arrives at Mombasa port we handle the clearing, get the car registered and use the logbook to secure the client’s loan,” said Sir Eric Ngigi, CEO, Maridady Motors.

Besides asset financing, the car dealer has also introduced the lay-by model. This targets customers who are more inclined to saving for products rather than taking loans to finance the same.

In this model, clients sign a contract to save money with the company for a period of between six months and a year to buy a car.

Usually, the customer makes an initial deposit of about 10 per cent of the value of the vehicle, the client decides on how much to pay in instalments so as to complete payment for the car within the stipulated period.

“There are cases where we consider shorter or longer periods. We limit the payments to one year because taxes keep changing, so we do not want a situation where we agree on three years and tax increments affect the landing cost of the vehicle.

“Some clients ask for one and a half years and we look at the type of vehicle they want and if it is not frequently affected by taxes, we consider the request,” said Mr Ngigi.

Maridady Motors has also introduced a product called “import to sell”.
This product targets individuals and groups that have idle capital and would like to make money from the same.

In this model, Maridady Motors utilises the idle capital to import vehicles, sell them and pay the partner 10 per cent profit for each vehicle sold.
The import and selling cycle usually takes four months, so the partner can earn up to 30 per cent return on investment per year.

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