Kenyans are increasingly turning to financing for purchase of cars amid depleted spending power occasioned by the high cost of living in the country.
Automotive technology company, Autochek, says the percentage of its customers opting for vehicle financing has shot up to 85 per cent this year compared to 65 per cent last year.
The jump comes at the wake of rising cost of living that is increasingly making it difficult for many Kenyans to buy cars, especially the middle-class keen on acquiring the units for family use and online tax-hailing business.
High prices of vehicles
Besides the high cost of living in the country, the selling prices of cars has significantly shot up amid a sharply weakening Kenyan Shilling against the Dollar as well as the low supply from key markets such as Japan and the United Kingdom.
“Autochek has witnessed a remarkable shift in consumer behaviour. Last year, 65 per cent of clients who bought cars at Autochek opted for financing. Fast forward to this year, and the numbers have soared to 80 per cent,” the firm noted in an update on the Kenyan market.
Inflation marked a year on year rise to 6.9 per cent last month and the soaring cost of goods and services further has squeezed Kenyans already faced with high prices of vehicles due to the weakening Shilling.
The number of cars being imported into Kenya dropped by three per cent to 63,990 units between January and March this year, as Kenyans battled dollar-driven price increases.
Car ownership
Autochek offers customers financing up to 80 per cent of the vehicle unit with interest rates of at least two percent, a move that has allowed it to competitively enter space that has for years been dominated by banks and micro-banks.
The Lagos-based automotive technology entered the Kenyan market in 2021, a year after it was launched to offer digital solutions meant to drive car ownership across the West and East Africa regions.
Its entry into Kenya saw it acquire Cheki Kenya and Uganda in 2021 as it sought to tap into existing players in the car selling business.