Buying a new or imported car on credit in Zambia

A market dominated by used Japanese imports

Most cars sold in Zambia are used imports from Japan, landed at Dar es Salaam, Durban or Walvis Bay and then driven or trucked inland. Toyota models such as the Corolla, the Vitz and the Hilux fill the car parks of Lusaka.

Zambian banks that finance vehicles

Stanbic Bank Zambia, Absa Bank Zambia, FNB Zambia, Zanaco and Standard Chartered offer vehicle finance in kwacha, often reserved for customers whose salary is paid into the bank and who buy from a recognised dealer or importer.

Dealerships and brand-new vehicles

In Lusaka and Kitwe, dealers selling Japanese, South African and Chinese brands work with the banks on bundled offers that include insurance and servicing. The kwacha price follows the dollar exchange rate at the time the order is placed.

Customs duties and ZRA clearance

An imported vehicle attracts customs duty, excise duty and VAT calculated by the Zambia Revenue Authority, with the amount depending on age and engine size. The bank generally finances only the cleared and registered value of the car.

Registration with the RTSA

The Road Transport and Safety Agency issues the registration certificate, on which the lender often records its interest. The bank keeps this document until the final payment, which prevents the borrower from quietly selling the vehicle before the loan is cleared.

Security interest recorded with PACRA

Thanks to the Movable Property (Security Interest) Act of 2016, the bank can also register its security over the car in the PACRA electronic registry, which a buyer can search before any private used-car sale between individuals.

Comprehensive cover required by Zambian lenders

Third-party insurance is compulsory by law, but a Zambian lender insists on a comprehensive policy naming the bank as beneficiary. Its annual cost, paid in kwacha, comes on top of the instalments and rises for older imported vehicles.

Vehicle age and loan term

Banks set a maximum vehicle age at the end of the loan. An older used Japanese import therefore gets a short term and high instalments, whereas a new model can be spread over several years with more manageable monthly payments.

Leasing as an option for companies

Mining companies in the Copperbelt, NGOs and transport firms often prefer finance leasing, which keeps the vehicle on the lessor's books, an approach explained on our page about car leasing in Zambia for businesses.

Taxis, minibuses and goods transport

Minibus drivers in Lusaka and hauliers running to the Kasumbalesa border look for commercial vehicle finance. Banks then ask for transport contracts, statements of takings and sometimes additional security before approving the loan.

Neighbouring Zimbabwe, a similar market

Conditions in Zambia resemble those in Zimbabwe, where used imports also dominate, as our page on the car loan in Zimbabwe shows. Here, however, borrowing is in kwacha, with an exchange risk on the purchase price.

Payroll loan instead of a car loan

Some civil servants buy a used vehicle with a PMEC payroll loan that takes no security over the car. The process is simpler, but the total cost can be higher than dedicated bank vehicle finance in kwacha over the same period.

From choosing a car to getting the keys in Zambia

1. Choose the vehicle and get a pro forma invoice from the dealer or importer, with chassis number and an estimate of ZRA duties.
2. Apply for finance at the bank where your salary is paid, with payslips, statements and your NRC card.
3. Pay the required deposit and take out comprehensive insurance naming the bank as first beneficiary.
4. Let the bank pay the seller directly, then register the vehicle with the RTSA noting the lender's interest.
5. Repay by monthly debit order and collect a registration certificate free of any charge after the final instalment.

Costs of vehicle finance in kwacha

Paperwork to finance a car in Lusaka

• NRC card and Zambian driving licence
• Pro forma invoice with chassis number and model
• Three to six months of payslips and bank statements
• Employer letter confirming the contract
• Comprehensive insurance certificate in favour of the bank
• ZRA clearance certificate for an imported vehicle

Pitfalls when financing a car in Zambia

• Buying an imported car without checking with ZRA and RTSA that duties were paid, which risks seizure after the purchase.
• Paying a deposit to a fake importer who posts photos of Japanese vehicles on Facebook and demands an MTN MoMo transfer before delivery.
• Choosing a used car that is too old, which the bank refuses to finance or finances over a term too short for your budget.
• Leaving the annual cost of comprehensive insurance and servicing out of the calculation of what you can repay each month.
• Selling the vehicle before clearing the loan, even though the security registered with PACRA makes the sale open to challenge.

Lenders to contact

• Stanbic Bank Zambia: Zambian commercial bank in the Standard Bank group offering individuals personal loans, home loans and vehicle finance solutions.
• Absa Bank Zambia: Zambian commercial bank providing borrowing solutions to individuals, including a mortgage loan offering longer repayment periods for home buyers.
• Stanbic Bank Zambia: Zambian commercial bank of the Standard Bank group offering home loans, vehicle finance and cash advance products to personal customers.

Questions about car finance in Zambia