Why Kenyans Have Been Paying More For A Used Car
The weakening of the Kenyan shilling, scarcity of vehicles and rising shipping costs have contributed to the increase in prices
For the past three months, Kenyans have been paying 30 per cent more to buy a used car than the average retail price.
The weakening of the Kenyan shilling, scarcity of vehicles and rising shipping costs have contributed to the increase in prices, with US$1 being worth Ksh117.90.
These factors have pushed up the price of a Toyota Vitz for example, above the Ksh1.2 million mark. This is a 26.3 per cent rise in the period under review.
A Toyota Vitz. /FILE
“The weakened shilling has hit the sector and now a Vitz that previously you could get for Ksh1 million is now costing Ksh250,000 more,” Charles Munyori, the secretary-general of the Kenya Auto Bazaar Association, said.
Munyori added that Kenyans should not expect prices to drop or remain unchanged in the coming months. As per tradition, car prices gradually fall from April to December but the trend has not been the case this year.
Other car varieties to have witnessed an increase in prices include popular 2015 Japanese models such as Toyota Harrier, Toyota Fielder and Toyota Premio and Nissan Sylphy which have gone up between Ksh150,000 and Ksh400,000 since April. A used 2015 Mazda Demio is retailing at 30 per cent more at Ksh1.3 million from Ksh1 million in March.
The increase in prices has also been blamed on a shortage of semiconductor chips which began in 2020 across the globe and has stretched to 2022, as well as other materials such as copper, aluminium and cobalt.
As result, fewer new vehicles have been produced, leading more buyers to turn to used cars, whose demand has seen the prices of second-hand vehicles go up further.
The price shock has affected individuals and companies who buy vehicles using bank loans that cover vehicles that are less than eight years old and recover the debt within four years.
Mainly affected are vehicles registered in 2015, which are those within the eight years allowed as imports into the country. Vehicles from Japan dominate the Kenyan second-hand car market with a market share of more than 80 per cent.
A 2015 Honda Fit is now retailing at Ksh1.3 million from Ksh1.15 million in March while the cost of Nissan Sylphy has increased to Ksh1.4 million from Ksh1.25 million. Mazda Demio, Honda Fit and Vitz are popular with ride-hailing apps like Uber and Bolt and the increase in prices risk affecting many youths who purchase the units to join the transport sector.
The cost of a used Mercedes Benz C-200 2015 model has shot up by Ksh0.5 million to Ksh2.7 million in the same period while the cost of a Toyota Premio has increased to Ksh2.2 million from Ksh1.6 million.
A 2015 Land Cruiser ZX (petrol engine) is now retailing at Ksh9.5 million from Ksh8 million in March, slowing sales of the high-end car that dealers expected to pick up during the campaign season as Kenyans head to the August 9 General Elections.
George Wajackoyah on the campaign trail in a Lexus LX570 estimated to cost Ksh15 million. /TWITTER