Knowing what to expect and do can make all the difference in buying a good car and also prevent you from being defrauded .Whether you are planning to buy a brand new, used car, you need to be sure and safe.
With digitization there are many changes the process of buying used car. If it’s your first time buying a car or you have bought cars before, our detailed process of buying used car will be of much help to you.
Learn the right and current detailed process of buying car in Kenya from planning the budget-how much? , to making the choice- what are your needs and preferences? ,doing due diligence checks-what do you need to know?, making payments- how and when do you pay? , through to the vehicle handover- where and when does the exchange happen? And finally ownership transfer-what’s the best time?
It does not matter whom you are buying from, someone you know, local car dealerships or a complete stranger, its best to know the step by step process of buying a used car and we have below a ten step detailed process on buying a car.
Plan a budget.
Know how much you can afford to spend, the amount of money to spend depends on source. Funds to buy a car are mostly from borrowed finance(loans), Savings or being gifted by a parent, friend, spouse or a backer (sponsor).
When taking a loan consult your financial institution to see what amount you qualify for.Amount one can qualify for depends on whether you have other credit facilities with that or other institutions, other sources of money to repay the loan like salary,business cash flows etc.your credit rating, your disposable income and what percentage of the car cost they finance. A simple online loan calculator may not factor in all these.
If looking for car financing options check restrictions on age and country of origin the financier accepts when issuing car loans .
If you are buying the car in installments consult the dealership know how many installments they allow and what’s the maximum tenor on such an arrangement to see if you can keep up with the monthly statements.
For the credit options do find out what’s the penalty interest in case you are not able to keep up with the payments.
Identify what kind of car you need, want and can afford
Decide on the exact make and model you want. Of course you want the best car, your dream car, but that may not be what you can afford or is available at the time of purchase. Keep an open mind and be ready to make some compromise .If you still manage to land your dream car…. well done you.
The kind of car to choose depends on needs such as space (for family or business), individual preferences on things such as car make and model (most people are keen on these due to spare parts availability), car size, engine capacity (CC), sitting capacity, preferred colors.
Interiors (leather or fabric seats, black white, brown, mahogany finish etc.) alloy or steel rims. You may be looking for a car with a sunroof or roof rack .Whatever your dreams are, they are valid.
Note that, some of these additional features add to the cost of the car. Knowing what you want helps a lot because there are a lot of beautiful, varied cars in the market and without knowing what you want you will be swayed in many directions and probably end up with something you don’t like.
Searching the car of choice
Once you have an idea of what you are looking for in a car and how much money you have to spend, its time to search the car.
Read reviews on models cars you have chosen to understand how the car works better, what kind of problems it normally gets, how efficient it is, see if there have been recalls etc.
Once you are happy with that, visit yards or go online. My advice is that you first go online to see what’s out there. Just type cars for sale in ….. (Country of purchase) and various websites will load giving you many options. Scan the various sites and see cars that match your preferences.
Don’t limit yourself though, check out cars outside your preferences both old and new, you will be surprised at how many other cars are out there that meet your needs and budget.
Once you identify cars you like get in touch with the listed seller, phone and email addresses are available on most of the listings.
Be cautious on what’s posted online. Some deals are too good to be true. I almost fell victim to a used car sale scam, don’t get cheated.
Beware of terms such as salvage vehicles, flood vehicles or rebuild salvage. These are cars that have been written off by insurance companies and may have been rebuild or repaired.
Plan a suitable time to view the car(s). Note there is no need to carry money at this stage. You are only viewing to see if the car(s) fits your needs.
You can visit the car yard(s) to view the car(s), some private sellers may offer to bring it to your location, or you can meet at a central location.
View as many cars as you have time to, don’t in a rush, and take your time check out both the exterior and interior.
Accessing the car and doing a test drive
Do a thorough check on car(s) you decide to view. It’s only smart to verify the cars condition and value.
You can bring a friend who knows cars or a mechanic of choice and get their opinion ask for a referral from friends or family with cars. Note the Mechanic may charge a small fee, if he does not it’s only fair to buy his some lunch for his time and judgement.
Let the seller know you want to do a test drive. They will probably come along or give you someone to go with you (just in case you drive off, they too are cautious of fake buyers so don’t feel like they are hiding stuff or not trusting you).However, If they are not willing to let you do it then walk away.
Assuming he is agreeable, don’t hold back, drive that car as if it was your own. Take a long route, take it uphill, take it downhill, Increase and reduce speed, brake suddenly, rotate side mirrors, run the wipers, put on the radio and pump up the volume, signal where necessary, check if all speakers are working, put on all lights.
Agree on the sale
This is where you formalize the intent to purchase.
Now that you have the final choice of car(s), you’ve done a test drive and are ok, you now need to engage the owner(s) to close in the purchase.
How much is the car really worth
Ask the seller for a valuation report or do your own and agree on a price. Beware though that in this era of corruption, values may be adjusted upwards to match the asking price by the seller. Feel free to do an independent a valuation on your final choice.
Note that the valuation cost here is bore by the buyer .You can start with a few free online valuations, and then do a valuation on the final one choice of car.
If getting a car loan from a bank, just do it with the bank as most banks will ask for a fresh valuation from a valuer on their panel.
Close on the sale price
Everyone likes a bargain, so don’t shy away in asking for a discount or reduced price. Try get a discount i.e. a buying price lower than that stated on the valuation report.
Remember price is not the only discount you can get, try negotiating for better or new mats or even tinting of the windows.
Having done an online search and visited several dealers, you have an idea what range the car you like goes for . Based on these,see if the stated price of your preferred choice overrated or fair.
Car Sale agreement
Once you have agreed on a price you need to do an agreement with the seller. Either you or the seller can provide the sale agreement. In case you need one, don’t sweat it, simply download our free printable car sale agreement template.
Fill the sale agreement in triplicate and have it witnessed. One copy will be retained by the seller, one by yourself and an extra one for the bank in case you are getting financed for the purchase.
Bring a copy of your PIN and ID, the seller will in turn provide theirs plus the logbook copy and car valuation report(s). No need for lawyers if you were to ask me but feel free to involve one if you feel strongly about it.
Make a deposit
It’s wise to make a deposit, if the seller has not already stated what he wants as deposit then you can discuss with the seller on how much you would like o pay or how much they would need paid as deposit , this should not be much though, say 10% to 30% of final agreed price.
If you will be financing the car via a loan,its wise to look for the financing ahead of time,just to be sure what you qualify for.
Get a receipt for the deposit and any further payments. Check with the seller on the return policy of the deposit should the sale not happen.
Due Diligence checks
I can’t over emphasize the importance of this step. If you skip everything else, get this right.
This is the only way to tell if you are being duped, you don’t want to lose your hard earned money. Buyer has to beware at all times so you need to verify details of ownership.
Confirm Vehicle Ownership
You need to confirm the owner is genuine. Copies of valuation reports and logbook copies given by sellers are not your reference here, you can choose to use that if you know the seller well but if you don’t, you need to do further independent checks.
You need to find out as much as you can on the car history where possible. You will probably be meeting the seller for a second time after the rounds of checking out various cars.
Having agreed on the sale, request for car and owners documents to do the due diligence checks. Request the owner to provide you with a copy of their ID (Local ID, Alien ID, their KRA PIN (Personal Identification number, yes the one for tax purposes), a copy of the logbook, the car shipping documents if available (get these for a newly imported car with no logbook or number plates).
These documents help you to check authenticity of a car owner on E-Citizen. Check the car history on importation documents and no of previous owners on the logbook.
Making the payment
Now that you have identified your car of choice, you have done your background checks and are satisfied. It’s time to put your money where your heart is.
The seller is probably getting other offers on the vehicle and will sell it to the first person who makes payment.
Sort the financing
It’s wise to make a deposit if you had not already done so. A deposit indicates seriousness in making the purchase and it also gets you commitment from the seller/dealer to reserve for you the car as you get full funds to completely pay for the car.
Approach your financial institution if applying for credit and get the money processed. Be ahead of the game, learn the full complete process of applying for bank car (asset) loan and plan ahead for what the bank will ask for when financing your car.
If bank financing does not work or gets delayed ,alert the seller as yiu also try looking into other car financing options .If you are using savings then you are all set.
Where to make car payments
Once you have finances secured, make payment or have the bank pay the balance after down payment (car deposit made earlier).
Avoid cash business as much as you can. It’s best to pay using a banker’s cheque or do a bank transfer.
Remember you need to get a receipt or proof of payment. Proof of payment could be a copy of the banker’s cheque issued or a bank deposit or transfer receipt.
Once payment is made you should receive the car, its keys, the original logbook and a manual if available
The car handover and takeover process
Physical transfer of car and keys should be done immediately the balance of payment is made. There are a lot of trust issues due to emerging frauds in the business so transfer depends whom you purchase from and how the car is being financed.
Once the deposit is made you can go to the seller and pick the car. However, if you don’t trust the buyer or vis versa, you can ask the seller to bring the car to a central location before making the deposit then hold it at a police station with instructions that you will pick it after payment(with proof) then go and make payments.
his should happen at the point of picking the car. Avoid procrastination
. If the car is not being financed, such that the bank is handling the transfer, have it done immediately.
Most people fail to transfer details of the logbook till later but it’s not advisable to wait. Get done with it as soon as possible.
Things happen, the seller might be unreachable after the sale or move away or die (probably an extreme but possible) so just do it.
Online vehicle transfer on NTSA Tims
Transfers are now easy and done online via NTSA-Tim’s you can make the transfers from anywhere via phone or a computer as long as you have internet connectivity or can visit a nearby cyber.
Create accounts on the NTSA-Tims Citizen service portal .If you already have an account, then log in to your existing account and start the transfer. Transfers online can only be initiated by the seller so try do it when picking the vehicle.
When and where to collect your logbook
NTSA will advise the date the logbook is ready via an SMS .Logbooks take about one month to get ready.
Logbooks are collected at NTSA offices in Upperhill,Nairobi Kenya.You will be required to carry the original old logbook and your identification documents to NTSA offices to collect the new logbook.
If sending someone to collect on your behalf give them your original ID to present when collecting. Remember to pick the original logbook from the seller.
Transfers take about a week so do go check the progress (They sometimes also send SMS alerts when the logbook is ready) and collect the new logbook.
If the purchase was via a bank the transfer will be handled by the bank. The logbook will be jointly registered between you and the bank. The logbook will be released to you for transfer to your name upon final payment of the advanced finance.