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Getting a Bank Loan for a Car- Things you need to know about Kenyan Banks

10 Nov

Dear Readers,

You may have wanted to, are thinking off or have already had an experience with a Kenyan Bank in purchasing a car through “Vehicle Asset Finance”. Here’s some things you need to know, because after my personal experience I would like to share and hopefully you won’t be so much in the dark or have a terrible experience.

1- If you buy a brand new car from the “Showroom” you will be treated like royalty by both Seller and Bank.

2- If you buy a car from an individual, be rest assured the Bank will not “like it” and will require Company registration etc. So don’t stress yourself, even if your friend is selling you the car, make sure he has a company that already deals in import/export etc of the car business. Life is easier.

3- If you buy the car from a reputable dealer, fish around well, because some have experience of dealing with Banks and some don’t. The thing to look out for here is, the value of the car and you are not being overcharged.

Please note all Banks give nearly the same terms and conditions and even interest rates, but still call at least 3 banks and choose those that you already know anybody working in the bank or has had experience with purchasing from them before. References always help. The Bank will assign you a contact person to facilitate your transactions, but here be mindful meet him/her at the Bank and make sure they are not roaming around from Branch to Branch and wasting your time, this eats up your time in travel/traffic and/or explaining to the Boss why you are leaving the office, if he/she can come to your office regularly and do the necessary even better. The Bank will not give you any Checklist of what is really exactly required to make this happen or complete the process, which by the way can take up to 1 week (brand new car), 4 to 6 weeks (ex-Japan etc cars). So here’s a few things you will need to be prepared for:

 

1- Vehicle must be valued at Regent or any other Valuer “they” say, Seller may/may not do it. (48 hours)

2- Vehicle must have an alarm system/tracking device- Bank will need an Alarm Certificate so whoever installs it, make sure they give you this copy. (72 hours)

3- Vehicle Log Book Copy, Seller Company Letter Head with Complete Contact Proforma Invoice, Sales Agreement, (You might as well make a complete brochure with everything possible).

4- In case Seller is selling on behalf of an Individual then you need: Individual Selling Authority Agreement Letter- again with Complete Signatures, Contacts and Letterhead, Individual PIN, Transfer of Log Book Signed Copies. Proof of payment of Deposit to the Seller, this can be a RECEIPT or even a full invoice with detailed explanation will be better.

5- Vehicle will need complete insurance (Bank will tell you who to buy it from), this is comprehensive and nearly 30% of the car’s value. (You can pay by cheque but if you have CASH even better/faster).

6- All other bank charges e.g. Fees etc need to be paid in CASH (there’s no shortcut, for example even if you have an account with the Bank it makes no difference, you must pay cash).

7- Your documents include: ID, PIN, Payslips/Company Registration, PIN, Bank Statements, Tax Compliance, Sign a couple of their forms and commit to small fees here/there. (I wonder why they don’t ask for a driver’s license or drivers good record?)

8- KRA takes up to 2 weeks on search etc on the log book of Ex-Japan or Used vehicles, so don’t stress the Bank on the status, sit back and relax.

9- Sometimes the Bank likes to see the Seller’s face or office, please indulge and take them there, it will help.

10- Bank will take up to 4 days or more depending if a Holiday/weekend comes in the way to pass 1st step which is Loan approval. Here, remember for Vehicle Asset Finance, they don’t work on Saturday or Sunday and very rarely keep you up to date on Email or Phone, so the chase begins.

The most important thing I have to stress: MAKE COPIES OF ALL YOUR DOCUMENTS THAT YOU SUBMIT TO THE BANK AND WHERE THEY MAKE YOU SIGN, in case they lose them etc or delay the matter, you have your work and be secured.

There maybe various reasons why Banks internally fail to live up to their efficient “come to us and we’ll give you a loan ASAP” but you be prepared on your end and be ready that you will face hurdles that are sometimes unnecessary or ridiculous time wasters. Main thing is that after all the blood, sweat and tears when you do get the Vehicle, it is simple deductions and life ultimately goes on.

All the best.

NB: This post is not meant to slander any Bank, but to help you- the customer.

3-

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Posted by on November 10, 2014 in Uncategorized

 

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