For a fraction of the price, drive a top brand name machine

A BMW X5. PHOTO | COURTESY |  WIKIPEDIA

By VICTOR JUMA

In Summary

• The middle class who aspire for a taste of refined driving now opt to buy second-hand brand name vehicles.
• Secrecy in selling cars to the wealthy is apparently obligatory and indiscretion can starve a dealer of orders in that small, all-important circle.

Not too long ago, cars with luxury badges were a preserve of the super-rich. Not anymore.

Kenyans with a few million in the bank are increasingly playing catch-up through purchases of used Mercedes, BMW, Range Rover and Toyota brands at a fraction of their showroom price tags.

This has expanded the level of equality, at least on the road. And who are helping the middle class match the consumption of top professionals, entrepreneurs, politicians and wheeler-dealers?

Second-hand car dealers and individuals have mastered the art of sourcing the luxury vehicles from countries like the UK and Japan. Citizens in these countries keep their cars for only a few years out of personal choice or to avoid the high costs of complying with stringent roadworthiness and emission standards applied on ageing automobiles.

Scores of luxury cars have also landed in Kenya after being stolen abroad, according to Interpol. Whichever way they arrive here, the second-hand luxury cars are helping many Kenyans take part in status signalling as well as enjoying more refined motoring on a budget.

There is also the occasional wealthy individual who buys a second-hand model to sidestep showroom prices they consider to be exorbitant.

“We sell to a diverse group including entrepreneurs, CEOs, expatriates and other professionals,” says Reagan Kibugi, the managing director of Windsor Motors on Kiambu Road.

“Most are people who have made a few millions and want a high-end car for those amounts. There’s the occasional wealthy buyer who just wants a bargain.”

He gives the example of expatriates who may be given car grants of up to Sh3 million by their employers. He observes that for that sum, an expatriate seeking an SUV to use on Kenya’s bumpy roads has no choice but to visit the roadside yards where they may have to top-up to get their car of choice.

Kibugi says used luxury cars can be up to 50 per cent cheaper compared to those in local showrooms, with year of manufacture being the major determinant for the actual pricing.

Most of the traditional high-end makes like Mercedes, BMW, Range Rover and Toyota Land Cruisers can be had from as low as Sh4 million.

The bulk of used car dealers’ inventory is made up of seven-year old cars to minimise the impact of import taxes and ultimately maintain their price advantage over new car sellers. Imports of used cars are capped at eight years from the date of manufacture, with newer units attracting progressively higher taxes.

Using 2008 as the year of manufacture, a used Range Rover Sport is retailing at between Sh4.5 million and Sh5 million in Nairobi according to Anthony Wainaina of Executive Super Rides on Ngong Road. The price of a Toyota Land Cruiser starts from Sh5 million, a Mercedes ML ranges between Sh4 million and Sh5 million depending on the model while a BMW X5 sells from Sh4.2 million.

A brand new showroom Mercedes ML would go for an average of Sh6.1 million, a Toyota Land Cruiser at Sh8.2 million and Sh12.6 million for a BMW X5.

While most purchases are funded by bank loans, some individuals pay in cash especially when they choose to import directly or through agents who don’t want to hold stocks. One such agent is Karuoro Waithaka of Zero260 who processes orders from individual clients.