With the new Kenyan policy on imported vehicles launching soon, it could be wise to sell your used car early or order your planned car immediately
If the government has its way- and they seem super determined to do so- car costs in Kenya are just about to skyrocket.
You see, the ministry of trade has been working on mechanisms to implement the new Kenyan policy on imported vehicles which will see the age limit of imported cars reduce from the prevailing eight to five years.
That’s not all:
The government is also keen on enforcing a new cumulative computation of car importation taxes (depending on customs valuation) which will see the prices soar even further.
So, how deeper do you have to dig for your new vehicle?
The new Kenyan policy on imported vehicles will see the starting price of second-hand cars rise to over shs. 1 Million
Let’s take an example:
With about shs. 700000, you can comfortably bring in a Toyota Vitz to your doorstep based on the existing 8-year rule.
Let’s now see what happen once the 5-year rule comes into force…
Vehicles typically attract an import duty at the rate of 25 percent, excise duty at 30 percent and VAT (valued added tax) of 16 percent.
These you pay cumulatively and in exactly, that order.
Now, based on the new age and valuation regime, the usually affordable Vitz will set you back possibly Sh1.2 million!
Can you now see why car importation dealers have been vehemently protesting the reviewed laws?
Well, let’s come to your current car or your prospective car (assuming you have been saving/planning for one)
Could it be time to Sell and/or Buy your dream Car?
Now, trade cabinet secretary Peter Munya has instructed KEBS (Kenya Bureau of Standards) to put in place measures to ensure the draft National Automotive Policy Framework is operationalized from July.
Which means one thing:
Your pocket could be hit hard if you continue dilly-dallying on your decision to order your beloved car.
Plus, it doesn’t matter your dream car. All indicators are that everyone will have to cough up a whole lot more.
For instance, a 2012 Toyota Land Cruiser VX (4.6-litre petrol) will shoot to Shs. 11 million (5 year rule) from the present-day Sh7 million.
Similarly, a 2012 Toyota Harrier (2.4-litre petrol) will cost you a mammoth Sh4.3 million against the current asking price of Sh2.8 million.
There are other reasons why you should make haste:
- Japan has very few vendors of newer cars
The Japanese second hand motor vehicle market is hugely influenced by the going-ons in the Kenyan market, which has always favored 8-year old cars (to keep prices low).
For this reason, the sellers for these new vehicles are few and far in between hence there is low competition amongst themselves.
These sellers hence tend to exorbitantly price vehicles aged 5 years and below.
- Locally assembled cars are still comparatively expensive
The government reasons for this drastic policy review are that first, they want to reduce emissions in our roads.
Then, they want to promote the emerging local car assemblies to boost job creation.
But the prices on offer at the local assemblers like the Thika-based Peugeot assembly plant as still way beyond the reach of most Kenyans.
For example, the tiny Suzuki Alto 800cc , popular among Uber chap chap drivers costs a whooping Kshs.. 1 Million at CMC motors.
Meanwhile, a locally assembled Peugeot 3008 SUV costs over Sh4 million.
- Cars sales have slackened off
The Kenyan car industry has somewhat slowed down compared to its heydays during the former President Kibaki era.
Indeed, second-hand cars in showrooms and other markets options such as the popular Jamhuri car bazaar are taking longer to dispose of.
And so you might struggle to sell off your car in time to commence the process of importing your target car.
This could again be detrimental if your plan is to use your old car proceeds to pay for your new car.
Final word
The suggested Kenyan policy on imported vehicles will have far and wide-reaching implications on the Japanese imported car pricing.
And since the government seems hell-bent to operationalize the proposals, this could be the best time to purchase your dream vehicle.
Otherwise, you may need to dig much deeper into your pockets once D-day of July 2019 rolls around.
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