USED VEHICLES ON SALE AT A YARD IN MOMBSA. FILE PHOTO | NMG
Kenya’s used car business is growing
robustly on the back of an expanding urban middle class and increasingly
flexible financing options for buyers. Latest industry figures indicate
that we import an estimated 80,000 used vehicles annually. This means
that for every single new car on the road in Kenya there are roughly
four used ones.
Used cars are significantly cheaper
than the new. This has created and sustained demand for used cars.
Spurred by an entrepreneurial spirit, an increasing number of car
dealers are cashing in on this demand. This is signalled by the notable
number of used car yards in the capital city and other major urban
centres.
The
competition is intensifying and dealers have employed different
strategies to sharpen their competitive advantage. For instance, some
dealers are leveraging on digital tools such as mobile apps and websites
to reach more customers, while others are inking strategic partnerships
with financiers such as commercial banks to sweeten the pot.
Unfortunately,
amid the race to corner the used car market, a few unscrupulous dealers
and brokers have crept into the market. Many Kenyans have fallen victim
to these scammers.
In 2012, the Embassy of Kenya in
Japan disclosed that it was overwhelmed with requests on how to recover
funds paid to unscrupulous Japanese companies for the purchase of
second-hand motor vehicles.
Fraud has become more
prevalent in recent years. The problem has been exacerbated by digital
tools such as clone websites, where unsuspecting victims send money to
purported dealers. These clone websites disappear.
Besides outright fraud, other practices that we have
witnessed and that are being reported with greater frequency include
buying ex-accident cars, buying cars that have falsified mileage, and
buying stolen vehicles.
Some dealers wind back the
car’s odometer to understate mileage in order to shore up market value.
They even go as far as replacing the pedal rubbers and gear knobs to
make it look newer. This is not only fraudulent, but potentially
dangerous.
Certain
car parts, such as the timing belt for most cars, are typically
supposed to be replaced once a car clocks 100,000 kilometres. This means
that if the mileage has been understated, the timing belt will not be
replaced when it should, increasing the chances of it snapping
unexpectedly. If it does when the car is on the road, the safety of the
driver and other road users is seriously compromised.
Other
dealers also sell ex-accident cars that have been carefully resprayed
but nonetheless have serious mechanical faults. Once these cars are
bought, the unlucky owner spends half of their time in the garage. Such a
blatant rip-off can be devastating for a car owner, particularly if
they bought the car on credit and are stuck with loan repayment.
Buyers
need to know that they can get credible information about a car’s age
and mileage by simply visiting websites of vehicle inspection firms like
JEVIC. There you can get an auction sheet where you can countercheck
the actual mileage and mechanical condition. You can also contact
Interpol to confirm whether you are buying a stolen car.
It
is equally important to consult widely before making a purchase. For
instance, consulting with a bank that has a track record in asset
finance could help you settle on reputable dealers.
Because
an asset financier underwrites the car loan using the car, it directly
serves in their interest to connect you to reputable dealers who will
sell you a car that is in mint condition.
These are
simple yet indispensable tips to avoid getting scammed. Since a vehicle
is probably the largest purchase most people make after a house, the
importance of getting the right information before making a purchase
decision cannot be overstated.
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