Financing a car in Kenya: asset finance and vehicle loans
In Kenya, buying a car is mostly financed through bank asset finance, where the lender holds the vehicle logbook as security, with a deposit, comprehensive insurance and a shilling rate set by each lender.
Kenya's car market in simple figures
Most cars sold in Kenya are used Japanese imports landed at the port of Mombasa and subject to an eight-year age limit. Toyota clearly dominates, followed by Nissan, Subaru and Mazda, in showrooms across Nairobi and Mombasa.
How bank asset finance works in Kenya
The lender pays the seller, then the vehicle is registered with the NTSA jointly in the names of the bank and the buyer. The logbook stays pledged until the final repayment, securing the loan without any other collateral.
Main car lenders in Kenya
NCBA, Stanbic, KCB, Absa, Co-operative Bank, I&M and Equity finance new cars and used imports. SACCOs also lend members money for a vehicle, and dealers such as Toyota Kenya refer their customers to partner banks.
Deposit and term required by Kenyan banks
Banks generally ask for a deposit, often between 10 and 30% of the price depending on the vehicle's age. The term is usually three to five years and gets shorter as an imported car nears the age limit.
Importing a car yourself from Japan
Some buyers go through an importer or a Japanese website, then finance customs clearance. The bank loan often comes after arrival in Mombasa and inspection, because the bank wants an identified, registered vehicle before disbursing.
Duties, inspection and vehicle registration
The final price includes import duty, excise duty and VAT calculated by the Kenya Revenue Authority, plus the pre-shipment inspection required by the Kenya Bureau of Standards. Registration then takes place with the NTSA through the eCitizen portal.
Compulsory insurance while the loan runs
As long as the vehicle is financed, comprehensive cover from an IRA-licensed insurer is required, with the bank named as beneficiary. Lenders often also insist on a GPS tracker to limit the risk of theft in Nairobi.
Car loan or leasing for business use
Companies, ride-hailing drivers and matatu owners may prefer finance or operating leases, which sometimes include maintenance. Our guide to car leasing for Kenyan fleets compares these options in detail with a financed purchase.
Boda boda motorbikes and small vehicles
Boda boda motorcycle taxis are often financed by specialist firms such as Watu, with daily or weekly repayments and the logbook held until the balance is cleared. The total cost should be converted into an annual rate before comparing it with a bank loan.
Personal loan instead of a secured car loan
An employee can also buy a car with a Kenyan unsecured personal loan, which leaves the logbook free. However, the amount available is capped by salary, and the rate is often higher than for asset finance.
Logbook loans: be careful borrowing against your car
Non-bank lenders grant quick loans against the logbook of a car that is already paid off. Monthly charges can be heavy and repossession fast, so check that the security is registered in the movable collateral registry.
Kenyan car finance compared with Ethiopia
Kenyan conditions remain more varied than in several countries in the region, where bank car lending is limited. By comparison, car financing in Ethiopia relies on an import market that is far more heavily taxed.
Buying a car on credit in Kenya: the process
- Choose the vehicle and get the pro forma invoice from the dealer or importer, including the chassis number.
- Ask several banks for a quote, stating the vehicle's age, the deposit you have and the term you want.
- Submit your file with bank statements, payslips and KRA PIN, then obtain the letter of offer.
- Have the vehicle valued by an assessor approved by the bank and take out comprehensive insurance.
- Pay the deposit, let the bank pay the seller and register the logbook in joint names with the NTSA.
- Repay by monthly debit, then ask for the bank to be removed from the logbook after the last instalment.
Charges on a Kenyan car loan
| Item | Indicative level | Depends on |
|---|---|---|
| Deposit | 10 to 30% of the price (indicative) | Age and type of vehicle |
| Loan rate | KESONIA plus bank premium | Borrower profile and security |
| Comprehensive insurance | Annual percentage of the value | Insurer, model and use |
| Vehicle valuation | Flat fee in KES | Assessor chosen by the bank |
| GPS tracker | Installation and subscription | Lender requirement |
Papers needed for a car loan in Kenya
- National ID card and KRA PIN
- Recent payslips and six months of bank statements
- Pro forma invoice or vehicle sale agreement
- Copy of the logbook for a locally used car
- Vehicle inspection and valuation report
- Certificate of incorporation and CR12 for a company
Common mistakes with a Kenyan car loan
- Choosing an imported car too close to the eight-year limit, which shortens the financing term the bank will accept.
- Paying an importer without a contract or proof of shipment, then finding out the vehicle will never arrive in Mombasa.
- Buying a locally used car without checking on eCitizen that the logbook is not already pledged to a lender.
- Letting comprehensive insurance lapse during the loan, which is a breach of the financing agreement.
- Taking an expensive logbook loan to cover instalments on the original car loan, at the risk of losing the vehicle.
Lenders to contact
- KCB Bank Kenya: Kenyan commercial bank offering unsecured personal loans, home loans and credit accessible through its mobile banking application.
- KCB Bank Kenya: Kenyan commercial bank of the KCB Group offering mobile loans, including the KCB M-Pesa Loan accessible directly from a phone.
Your questions on car finance in Kenya
Can you finance a car older than five years in Kenya?
Yes, if it is still within the import age limit, but the loan term will often be shortened. Banks want the vehicle to keep enough value until the final instalment, and some turn down the oldest models.
Who holds the logbook during repayment?
The vehicle is registered with the NTSA jointly in the names of the buyer and the bank. The buyer uses it freely but cannot sell it without the lender's consent before the loan is paid off.
Can a self-employed Kenyan without a payslip finance a car?
Yes, provided regular income is shown through bank or M-Pesa statements, KRA tax returns and sometimes accounts. The deposit required is often higher than for a salaried worker whose pay goes into the bank.
Are electric cars financed in Kenya?
A few banks and local assemblers are starting to offer deals on electric cars and motorbikes, particularly in Nairobi. The charging network is still limited, however, and terms depend heavily on the model and the lender.