Is It Cheaper to Import a Car or Buy a Kenyan Car?

Import or buy a Kenya car locally? MHH International
One of the biggest questions everyone is faced with when buying a car is; ‘is it going to be cheaper to buy an import car or a local car?’ This article will give you the balanced information you need to make that decision. There are benefits to both routes but these are different depending on the type of car and the budget you plan to spend.

Cars Under 2 million Ksh

There is no simple answer as to whether importing is cheaper or not. But we would advise that cars under 2million Ksh are much more likely to be cheaper when bought locally through reputable Kenyan dealers. This is because these cars are often bought in bulk from Japan, hundreds at a time. This gives the buyers the best buying rates, shipping rates and storage rates. These sellers are shipping such huge volumes of cars they can keep their margins very low, giving you a great price.

The process of importing one car is more involved. It starts with buying a car from a reseller (UK or Japan) or dealing with an agent and buying through an auction and continues through the journey to Kenya. All of the people involved are adding their professionalism to help you get a better car which also adds a margin. When you are importing a lower priced car, these fees are disproportionate to the price of the car. This means that by the time car is imported into Kenya the costs are higher than the costs of buying that car locally. For this reason, we explain to clients who are wanting to buy a car for 2million Ksh or less, we really won’t be competitive when providing a high level sourcing service for them. We would love to offer cheaper cars, but our service is not benefitting you in the way a more premium car import will benefit.

Cars Over 2.5 Million Ksh

Used Cars

The benefits of car importing really applies to cars priced at 2.5 million Ksh and above. The main reason for this is that any dealer who is going to speculatively import a car into Kenya to retail it is likely to have a high profit margin on it. As a guide, the more expensive the purchase price of a car, the more likely there is to be a price advantage to importing. Also the more money you plan to spend on your car, the more discerning you are likely to be about the specification of the car that you want. The range of choice locally is much more restricted and you are likely to have to choose between very few cars. This makes it more unlikely that one of these will have your ideal colour, spec, age, and mileage etc. Importing gives you the choice of all options and specs including cars that aren’t available locally.  

With used cars there is also the added advantage that you have access to more documentation to verify the service history, specification, mileage and damage history. Local cars are not sold with this level of documentation and making it more difficult to prove the history and verify the mileage. Where safety is concerned, this is a significant risk. Running costs are also a vital part to consider. Although the initial price of a car may be cheap, the ongoing running costs car can quickly increase if you buy a car that has issues. Obviously, a car that has been driven locally for some years on local roads is likely to have more ongoing issues than a car which has been driven on Japanese or UK roads. A car which has had its mileage tampered with, could have huge additional costs to you because the car is significantly older than advertised. So, it is important to you to see beyond the price of the car and assess the ongoing cost of maintaining and running your car for the next few years.

New Cars

Can new cars be cheaper than the new cars available in Kenya? The simple answer to this is yes, they can be, but not always. This depends on the make and the model. Small cars are often getting to a price of just 1 – 2 million Ksh as the manufacturers are striving to produce cars at more affordable prices. The recent drive by the Kenya Government to encourage local assembly cars is also designed to bring in more affordable cars.

When you are looking at medium sized cars such as the C Class Mercedes and small SUVs, local plants will produce low volumes of these. The dealers are typically selling a small handful of these each month. This means that their buying power with their manufacturer is not so great and the overheads for the showrooms are high. This can result in higher local prices for these mid-sized cars than the import prices.

In the case of the very high-end cars such as the BMW X5s, the Mercedes G wagons and Porsche Cayennes, again the dealers are perhaps selling one to two per month. This means their buying power with the manufacturer is poor and they have to buy the cars at a higher margin to cover their costs. Buying these cars as an import can make big savings because you can buy them from countries with very competitive car markets where dealers buy their cars at the lowest buying prices from the manufacturer and are able to discount more readily which makes the market price naturally lower. Often a like for like car could save 5-10million Ksh for a very high-end car which makes importing a ‘no-brainer’.

And finally, importing gives you the chance to buy cars which are not available locally. For example, the Lexus LX570 is not available in Kenya but can be imported for around the same price as a Landcruiser 200 Series. A Toyota Prado in Kenya costs in excess of 12 million Ksh whereas a new Japanese Prado can be imported into Kenya for between 2-4 million Ksh less than that with a lower specification.

To summarise, the more money you are going to invest in your next car, the more likely you are to want to import it: The more choice you have, the less risk you have of tampering, the more reliable the car for being driven on tarmac roads and the more scope there is for saving money. The cheaper the car is, the less appetite you are going to have for sending money overseas, there’s less scope for saving money and there’s a greater likelihood you are going to pay a higher price for a high-end import service.

Now that you are armed with the facts, we hope the decision of where to buy your car from is much clearer. If you are keen to import, then we would love to hear from you. Simply contact us for more details.

Call us on +44 (0)1483 275 756 or email us at enquiries@mhhinternational.com

 

 



Sign up to our newsletter and receive tips about the automotive industry.