List of Car Loans in Kenya

5 min


Car Loans in Kenya Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases.

Car purchases

The most common method of buying a car in the United States is borrowing the money and then paying it off in installments. Over 85% of new cars and half of used cars are financed (as opposed to being paid for in a lump sum with cash). Roughly 30% of new vehicles during the same time period were leased.

There are two primary methods of borrowing money to buy a car: direct and indirect. A direct loan is one that the borrower arranges with a lender directly. Indirect financing is arranged by the car dealership where the car is purchased. Legally, an indirect “loan” is not technically a loan; when a car buyer obtains financing facilitated by a dealership, the buyer and dealer sign a Retail Installment Sales Contract rather than a loan agreement. The dealer then typically sells or assigns that contract to a bank, credit union, or other financial institution. Usually, the dealer knows in advance which financial institution will buy the contract. The borrower then pays off the financial institution the same as for a direct loan. Typically, the indirect auto lender will set an interest rate, known as the “buy rate”. The auto dealer then adds a markup to that rate, and presents the result to the customer as the “contract rate”. These markups have been the focus of some regulatory scrutiny because they can cause variations in interest rates that are not correlated with credit risk.

Roughly half of new cars in the U.S. are financed by the captive financing arms of car manufacturers, such as the Ford Motor Credit Company. Captives have a smaller share of the overall car financing market (new and used cars), along with banks, credit unions, and finance companies. A small number of cars are financed directly by the dealership at “Buy Here Pay Here” dealers, which cater to customers with subprime credit. Buy Here Pay Here financing accounts for 6% of the total financing market.

Car financing options in the United Kingdom similarly include car loanshire purchase, personal contract hires (car leasing) and Personal Contract Purchases.

In 2016, Toyota was found guilty of racist lending practices.

Car leases

A lease is a contractual agreement between a lessor (the person who owns the property) and a lessee (the person who gets to use it during the term of the lease). Usually, car leases allow the lessee to drive the car for a certain number of miles (under 12,000 per year is standard) for a certain number of years (say, three years). The lessee pays a fixed monthly payment for the privilege of driving the vehicle, and when the lease ends, the lessee returns the vehicle to the lessor. Lease rates are not just based on what the car is worth today because the lessee does not buy the whole car. Instead, the lessee pays only for the value of the vehicle for the term of the lease. Lenders calculate lease payments based on the vehicle’s residual value, or what they estimate the car will be worth when the lease is over.[7]

Spot delivery

Main article: Spot delivery

Spot delivery (or spot financing) is a term used in the automobile industry that means delivery a vehicle to a buyer prior to financing on the vehicle being completed. Spot delivery is used by dealerships on the weekend or after bank hours to be able to deliver a vehicle when a final approval cannot be received from a bank.This method of delivery is regulated by many states in the U.S., and is sometimes referred to as a “Yo-Yo sale” or “Yo-Yo Financing”

Below are different types of car loans in Kenya that may be of help to you. Did you know that getting a car loan in Kenya is not that hard?

All you need to do is have collateral in case things go zigzag. Security can either be a title deed or logbook of the car to be purchased.

Car loans in Kenya depend on the borrower’s ability to repay the loan.

Types of Car Loans in Kenya

1. NIC Bank Car Loans

It is issued to customers who have monthly income and want to purchase a vehicle for personal use.


  • Minimum loan amount is Ksh. 300,000.
  • Maximum loan amount depends on the borrower’s ability to pay back.
  • Financing up to 90% of the vehicle’s value.
  • Loan repayment period is 6 years.


  • Copy of logbook for the vehicle to be purchased.
  • Copy of validated sale agreement with proof of contribution.
  • AA of Kenya/Franchise dealers valuation.

2. Stanbic Bank Car Loans

It is short term and is normally issued to borrowers who want to buy a car for their personal use.


  • Interest rates are very competitive.
  • Financing terms for up to 4 years. They are very flexible.
  • Stanbic bank finances cars ranging from saloon cars to pick-ups and also prime and earth movers.
  • Used or new cars may be financed.
  • The car remains the property of Stanbic bank until the borrower completes the loan. The ownership of the car will be transferred to the borrower once the last payment has been made.
  • The insurance premium financing option is available to help the borrower with insurance payments.
  • Automated updates of insurance expiry.

3. AMREF Sacco Car Loans

It is tailored for AMREF Sacco members who want to buy vehicles for personal use. The same car will be used as security for the financing of the loan.

Product Features

  • The maximum loan amount is Ksh. 5 million. A borrower needs to demonstrate the ability to repay the loan.
  • Financing can be up to 80% depending on the value of the car.
  • 36 months is the maximum tenure.
  • The interest rate is 1.5% p.m on a reducing balance.
  • Collateral will be the car being acquired.
  • The car being purchased should be less than 10 years old from the manufacture’s date.

4. Family Bank Car Loans

It is available to people who bank with Family Bank to help them purchase cars.


  • Get up to 80% of the money for brand new cars.
  • Loan repayment of up to 48 months for brand new cars.
  • Get up to 70% of the money for second-hand cars.
  • Loan repayment period of up to 36 months for second-hand cars.
  • Borrower’s minimum salary should be at least Ksh. 10,000 per month.
  • Minimum loan amount is very low.
  • No maximum loan requirement.
  • Car insurance will remain comprehensive for the period the car loan is being serviced unless a complication arises.
  • The repayment period of the car loan is between 12 to 48 months.
  • You buy the car and service the loan in installments as you continue to use it.
  • Loan approval is 2 days.


  • All used cars should be older than 10 years at the end of the loan expiry.
  • Application form.
  • Bank statement for the last 6 months.
  • Copy of ID.
  • Copy of KRA PIN.
  • Proforma invoice from the car dealer or seller.
  • Copy of logbooks.
  • The car should not be more than 12 years old at loan expiry.
  • Recent AA/ Regent Automobile valuers and assessors valuation.
  • Sale agreement.

5. Gulf Africa Bank Car Loans

It is given to individuals who want to buy new or used cars. The product is based on the Shariah contract – Diminishing Musharaka.


  • Profit rates are very competitive.
  • Service is personalised.
  • Financial consultation is free.
  • Monthly installments of up to 5 years. They are very competitive.
  • Easy access to insurance premium financing for the motor comprehensive insurance.


  • Financing new and used vehicles.


  • The application form that has been duly completed.
  • Payslips for the last 3 months. They must be certified.
  • Bank statements for the last 6 months. They must be original and certified.
  • Copy of ID or passport and KRA PIN certificate.
  • Colored passport size photo.
  • Copy of vehicle logbook.
  • Proforma invoice or sale agreement.

The car internal costs are all the costs consumers pay to own and operate a car. Normally these expenditures are divided by fixed or standing costs and variable or running costs. Fixed costs are those ones which do not depend on the distance traveled by the vehicle and which the owner must pay to keep the vehicle ready for use on the road, like insurance or road taxes. Variable or running costs are those that depend on the use of the car, like fuel or tolls

Like it? Share with your friends!