Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases. Types of Car Loans in Kenya. The most common method of buying a car in the United States is borrowing the money and then paying it off in installments. Over 85% of new cars and half of used cars are financed (as opposed to being paid for in a lump sum with cash). Roughly 30% of new vehicles during the same time period were leased
1. NIC Bank Car Loans
It is issued to customers who have monthly income and want to purchase a vehicle for personal use.
Features
- Minimum loan amount is Ksh. 300,000.
- Maximum loan amount depends on the borrower’s ability to pay back.
- Financing up to 90% of the vehicle’s value.
- Loan repayment period is 6 years.
Requirements
- Copy of logbook for the vehicle to be purchased.
- Copy of validated sale agreement with proof of contribution.
- AA of Kenya/Franchise dealers valuation.
2. Stanbic Bank Car Loans
It is short term and is normally issued to borrowers who want to buy a car for their personal use.
Features
- Interest rates are very competitive.
- Financing terms for up to 4 years. They are very flexible.
- Stanbic bank finances cars ranging from saloon cars to pick-ups and also prime and earth movers.
- Used or new cars may be financed.
- The car remains the property of Stanbic bank until the borrower completes the loan. The ownership of the car will be transferred to the borrower once the last payment has been made.
- The insurance premium financing option is available to help the borrower with insurance payments.
- Automated updates of insurance expiry.
3. AMREF Sacco Car Loans
It is tailored for AMREF Sacco members who want to buy vehicles for personal use. The same car will be used as security for the financing of the loan.
Product Features
- The maximum loan amount is Ksh. 5 million. A borrower needs to demonstrate the ability to repay the loan.
- Financing can be up to 80% depending on the value of the car.
- 36 months is the maximum tenure.
- The interest rate is 1.5% p.m on a reducing balance.
- Collateral will be the car being acquired.
- The car being purchased should be less than 10 years old from the manufacture’s date.
4. Family Bank Car Loans
It is available to people who bank with Family Bank to help them purchase cars.
Features
- Get up to 80% of the money for brand new cars.
- Loan repayment of up to 48 months for brand new cars.
- Get up to 70% of the money for second-hand cars.
- Loan repayment period of up to 36 months for second-hand cars.
- Borrower’s minimum salary should be at least Ksh. 10,000 per month.
- Minimum loan amount is very low.
- No maximum loan requirement.
- Car insurance will remain comprehensive for the period the car loan is being serviced unless a complication arises.
- The repayment period of the car loan is between 12 to 48 months.
- You buy the car and service the loan in installments as you continue to use it.
- Loan approval is 2 days.
Requirements
- All used cars should be older than 10 years at the end of the loan expiry.
- Application form.
- Bank statement for the last 6 months.
- Copy of ID.
- Copy of KRA PIN.
- Proforma invoice from the car dealer or seller.
- Copy of logbooks.
- The car should not be more than 12 years old at loan expiry.
- Recent AA/ Regent Automobile valuers and assessors valuation.
- Sale agreement.
5. Gulf Africa Bank Car Loans
It is given to individuals who want to buy new or used cars. The product is based on the Shariah contract – Diminishing Musharaka.
Benefits
- Profit rates are very competitive.
- Service is personalised.
- Financial consultation is free.
- Monthly installments of up to 5 years. They are very competitive.
- Easy access to insurance premium financing for the motor comprehensive insurance.
Features
- Financing new and used vehicles.
Requirements
- The application form that has been duly completed.
- Payslips for the last 3 months. They must be certified.
- Bank statements for the last 6 months. They must be original and certified.
- Copy of ID or passport and KRA PIN certificate.
- Colored passport size photo.
- Copy of vehicle logbook.
- Proforma invoice or sale agreement.
