Guide to Buying a Car
Now that you are ready to buy a car we will point you in the right direction, whether you decide on buying a brand new car from local dealerships, using a private auto broker or consultant, going through an established online service, or going it alone at your local used car dealership.
The Cars Have Changed - A lot has changed in 40 years. Today's vehicles last twice as long as the cars in the 70’s , but they cost ten times as much. In the 70’s a used car cost Ksh 4,000 and a brand new one cost about Ksh 30,000 the average new car now costs anything between ksh 50,000 ( second hand ) and Ksh 30,000,000.00. They also come in all colours, shapes and sizes with a variety to even confuse the most professional chameleon.
There are more around than ever before, we love them, hate them, and take them for granted. So you’d think, then that we’d put lots of thought into actually buying a car. Not so according to motoring experts Car – buying can be a minefield for women because the motor trade is not noted for its accommodating service towards females.
Don't Wait Until The Last Minute - Don't wait until the last minute to go car shopping. It can take up to 2 months to identify, test-drive, choose, finance, insure, purchase, and register a car, whether it's new or used. If you don't take your time, unscrupulous people can pressure you into making bad decisions. An anxious or desperate buyer is the car dealer's best friend.
It is currently a buyers market with many dealers struggling to sell cars, both new and reconditioned cars because of tougher competition.
This means that the customer is in a very strong position, your bargaining power has never been better.
Having done your homework about the car, you will know when the salesman is telling you something about a vehicle that isn’t true.
You go to a dealer in your area and look around. This could either be a brand new car dealership or a used car dealership.
Hire/Use an Auto Broker. Brokers can find a car matching your specifications, get the best financing, negotiate for you, and deliver the vehicle to your doorstep. If you have a trade, they'll find a buyer for it as well. This has become big business in East Africa as most people do not have the time to go around dealerships looking for a particular vehicle. An autobroker will source the vehicle for a commission.
Online buying, the third method, is fast becoming the preferred method for busy people who don't have the time to comparison shop at multiple dealers. If you're easily intimidated by salespeople, or dread dealer negotiations, we recommend online buying for you. This method provides a simple, quick, and painless sales experience, without the fear of being ripped off by an unscrupulous salesperson or business manager. The only challenge in this mode of purchase is that you will have to arrange for importation and clearance of the vehicle. This involves the following. The online buying experience is essentially the same as using a reputable auto broker. The only thing you need to worry about is deciding upon which vehicle is right for you.
Negotiation and Agreement of purchase price which is either Full on Board ( meaning you will arrange for Insurance And Freight or C.I.F - Cost Insurance and Freight where the exporter will arrange for insurance and freight of the cargo. The latter is the more convenient mode as you make payment to the exporter who will organize for shipment and you only deal with the clearance and customs regulations of the importing country. Once price is agreed with the buyer ( yourself) and have arranged for transfer of funds either by Bank transfer, letter of credit etc.
The supplier will then issue you a Proforma invoice that you will use to apply for a Customs Declaration Form at a cost of Ksh 5,000.(Kenya) On this form you must attach the proforma invoice and declare the details of the exporter, your details and your address and pin certificate details, customs classification of the goods being imported, the country of origin, the applicable duty and taxes that the good will attract. This will be used to confirm the purchase price ( based on current market prices ) confirm the mode of payment and the currency of purchase, also verifies the actual freight costs that the importer/exporter are paying. The Revenue authority verifies any anomalies at this point.
Once the Customs Declaration form is issued the importer will then fax or email a copy to the exporter who will then arrange for inspection with the inspecting body that has been appointed by the Kenya Revenue Authority to inspect goods for export.
The major challenge is that you cannot physically inspect the vehicle and we would recommend that you pay for an independent full mechanical inspection in the country of origin from a reputable inspection agency to ascertain the mechanical condition of the vehicle.
In the country of origin, you will have to pay for inspection charges conducted on behalf of Customs and Excise to ascertain that the vehicle is not stolen and is road worthy and conforms to the information on the purchase documents. This is an extra cost to the buyer. Most buyers are content with this inspection only, but technically it is not sufficient.
Before the car is shipped one must hire a clearing agent to confirm the applicable duty on the particular make and model of the vehicle being imported. Currently an estimated 100% of purchase price for duty and tax payments and an additional 40% to take care of miscellaneous costs ( clearance and transportation) Some of the other challenges you will face is that you will have to arrange for clearance of the motor vehicle at the Port of Discharge ( East Africa – Mombasa). Use an experienced and professional clearing agent Customs Clearance procedures and some information on Taxes. You will also need to identify a reliable and honest clearing agent to clear the vehicle for you.
The Auto broker handles everything else after you have selected the vehicle of choice and made part or full payment of the vehicle. The next step is easy, just go to the website and get your guaranteed best price quote from the site's network of participating dealers. Online buyers get competitive prices, while participating dealers benefit by trimming sales commissions and marketing expenses. This is the way of vehicle purchase in the future.
Do your own research and negotiations. Using our 20-step technique, you make a smart, informed decision about which car is right for you. You get your financing before you buy. You become familiar with leasing, warranties, and insurance. You use dealer inventories for hands-on evaluation and test-driving. After narrowing your search, you begin negotiations. If you decide on a used car, you use our rigorous pre-purchase inspection to detect major and minor problems. If everything checks out, you go on to final negotiations, and buy your car. Then you're savvy about potential problems down the road, and smart about maintenance.
It is currently a buyers market with many dealers struggling to sell cars, both new and reconditioned cars because of tougher competition.
This means that the customer is in a very strong position, your bargaining power has never been better.
Having done your homework about the car, you will know when the salesman is telling you something about a vehicle that isn’t true.
Don't Pay Too Much! - Learn How To Buy A New Or Used Car.
Have a Checklist with the following items -
PREPARE
As with all decision-making processes, preparation is key for getting good results. In the automobile business, knowledge is power. Our proven method helps you, the consumer; navigate the tricky waters of the automotive marketplace. You'll use the same process whether the car you want is new or used.
What will you be using it for? What does your vehicle need to do for you? What car will suit your lifestyle? What are the available choices and options? Review the various types of car, vans, pickups or trucks; safety features; front-wheel versus rear-wheel versus all-wheel drive; manual stick shift versus automatic transmission; optional equipment; and other considerations. Here's where you begin to sort through the huge variety of cars available, narrowing the choice down to a few categories. Use the internet consumer reviews on specific models that you have identified so that you can get a feel of what to expect. Is it just for you or will it be shared by your husband? Children? Drivers? Will you be driving around town or making longer journeys? – Up country travel
How much can I afford? The down payment and the monthly installment aren't the only costs of owning a car. You must anticipate the hidden expenses. To see what money you can realistically afford to put into your car, make a budget early in your car-buying quest. Look at your total income and what percentage of it you can afford to use monthly for purchase of the vehicle. If you need to finance, use a payment calculator to see how changes in rate, purchase price, term, and down payment can reduce your loan payments.
COMPARE
Locating a Good Vehicle - To be a smart car-buyer you need to comparison-shop. There are hundreds of places to look for new and used vehicles: here's where to find them.
Shop Around
Different showrooms offer different deals, so there’s no need to accept the first. Find a dealer who offers a good after sale service.
- New or Used Car and the Pros and cons of both options:- If you are a member talk to Auto Assured Technical department and they will advise
Hire/Use an Auto Broker. Brokers can find a car matching your specifications, get the best financing, negotiate for you, and deliver the vehicle to your doorstep. If you have a trade, they'll find a buyer for it as well. This has become big business in East Africa as most people do not have the time to go around dealerships looking for a particular vehicle. An auto broker will source the vehicle for a commission.
- Using Internet Resources: - Valuable shopping advice and price information online helps you refine your choices further. You become an expert on the cars on your list: what options they come with, what they go for in your area. There are various Discount internet buying services and they are great for busy people and for cost-conscious consumers who dread typical dealer negotiating or are fearful of being ripped off.
- Can you afford the car and its upkeep? Call new and used car dealerships and inquire about maintenance and service costs of the specific car makes and models, get specific details on the vehicle choices that you like. Also confirm if there are local dealerships that provide service and parts for that particular make and model. Rare models have very high costs of maintenance and parts are not locally available. This could also have a bearing on the insurance premiums that you will pay especially if the premiums are higher for rare models. Also get a feel of the applicable insurance premiums for vehicles within your price range (budget) and also include costs of anti-theft devices which are a requirement for insurance.
Ensure Personal Safety at all times.
If you are buying a car from the classified ads, people who only have mobile phone numbers, as a contact, “It’s advisable to take someone with you to view a car at a private address. If you can’t tell someone where you‘re going, Pass by the premises beforehand. If you don’t feel comfortable don’t go in.
AT THE DEALERSHIP
Do's
- Wise up and talk tough – remember you’re the customer.
- You don’t have to be a motor mechanic to get the best deal. Just learning a few basic steps will help steer you through a dodgy process.
- Arm yourself with as much information as possible about the car by reading car magazines and talking to people who own the model, you’re interested in.
Don’ts
- Never leave a showroom with the first care we see because we don’t want the hassle o f shopping around for it. Buying on impulse is one of the worst things you can do.
- Some people buy on looks and image alone and don’t think whether the car is going to be suitable for their needs, then they wonder why they’ve been ripped off.
> Ask For A Test Drive
Taking the Test Drive - The test drive comes WAY before any negotiation on price. You're here to experience for yourself how different makes and models handle and perform.
This will help you find out if the car is road worthy, but you might discover that it doesn’t suit you to drive. But if you are feeling canny enough to negotiate the price downwards – something that if you fall in love with it you will find it difficult to make a deal.
> Don’t Be Patronised
No salesman has the right to patronise you. Unfortunately, this is one the biggest complaints made by female buyers. In some showrooms the salesmen may even dismiss you because they are the opinion that you cannot in your life afford the cars on show.
Our advice is walk away the moment it happens and tells his boss exactly why you’re taking his business elsewhere.
> Beware of the Pressure
Don’t feel forced into making a snap decision. One of the classic cons is to suggest that a great deal is on offer.
Ask for a full service history, and if the car is fairly new, you should see stamps from a franchised dealer.
BUYING SECOND HAND CARS
Economic reasons may require many motorists to purchase second-hand vehicles. So are there clues that you can look for to determine if the used car your are interested in is accident-free?
This can be tricky especially if you are buying from a private seller, as you won’t be covered by a warranty if something goes wrong.
Make sure you do the following:-
- Test Drive
This is very important for second hand purchases. Check how the car feels on the road. Do the brakes feel smooth and reassuring? Rattles and clunks will reveal themselves, even on a short trip.
Test drive the car under varied road conditions - on hills, highways, and in stop-and-go traffic.
- Ask for the car's maintenance record. If the owner doesn't have copies, contact the dealership or repair shop where most of the work was done. They may share their files with you.
- Where possible talk to the previous owner, especially if the present owner is unfamiliar with the car's history.
- Make Sure the Documents Are In Order
This includes the registration documents, logbooks, purchase documents for new and reconditioned vehicles
- indicating the country of origin ,
- confirmation that all duties and taxes have been paid
- The engine number and chassis number on the vehicle correspond to the vehicle. If they can’t be produced, don’t buy the car.
Look for tell tale signs
Having test-driven the car, check it thoroughly. Look at the underside of the vehicle for the condition of the tyres and exhaust system. Also look for oil leaks and signs of rust. Seat belts should be free from damage and frays, but carpets can hide high mileage as thy might have been replaced. Locks, wipers, odometer, dashboard instruments, pedal condition and doorsills should also be checked.
Some of the areas you should focus on are :-
• Body Work: Looking for clues of structural damage
Buying a used car carries a lot more risks than getting a new one. You may run the risk of buying stolen cars or vehicles that have not been well maintained. You may even run the risk of buying cars that have been repaired after a major accident and therefore, may not be as road worthy as it should be. It is especially not recommended for potential car owners to buy used cars that has been in an accident, especially after a frontal collision because:
- The repair shops may not use original parts, opting for cheaper substitutes.
- A collision may cause many hidden mechanical problems such as wheel bearing damage or misalignment.
- A frontal collision will cause damage to the air conditioning and you might be left facing chronic air conditioning problems that are hard to fix.
- Accidents will compromise the integrity of the body, making it less strong and less able to withstand further impacts.
> Look down the length of the car
The lines of the car's body should be straight. The reflection on the side of the car should be perfect. Check the gaps between the mudguards, doors, bonnet and boot. Any gaps should be even along the entire length. If the gap is wide at the top and narrow at the bottom, this probably indicates that the car has been in an accident. Try to inspect all the gaps in the same way and pay particular attention to the unevenness in the gaps between the bonnet and front mudguards, and between the doors and front mudguards. These are good indicators of possible damage from frontal collision.
> Doors and Bonnet
If the position of a door or bonnet has been shifted from its original position, this could be another sign that the car has been involved in an accident. Look for spots of new paint behind the doors and under the bonnet and boot as further indication that the car has previously been repaired.
> Rust
Check the wheel arches, floor under the carpet, boot and door bottoms for signs of rust. Use a small magnet and try to make it cling to the bottom of the doors, mudguards and other places. If the magnet does not cling, this means that there is too much filler under the paint.
> Paint
Look at the car from various angles. The colour may look the same but at different angles, it is possible to note some small differences because it is very difficult to paint some replaced or damaged parts to the exact original colour. Run your hand over the body work. The original paint should be perfect flat. Unevenness is a sign that the area has been repainted.
> Vehicle's Frame
The Vehicles frame should never be compromised as it is essential for supporting the vehicle. Check the entire length of the frame. There shouldn't be any signs of cracks, welding traces or rust. If these defects are found, avoid buying the car.
> Tell-tale Flood Indications
How would you tell if a car has been flooded? Check under the carpets for excessive moisture. Check the car wheels and other metal parts for too much rust. If you find these elements, you may be right to suspect that the car has been flooded.
> yourself but make sure you ask an Expert to look at it – a professional technician or have the car inspected by a mechanic you hire
If a previously-enjoyed vehicle makes your final cut, don't make a 300,000 shilling mistake! A thorough mechanic's inspection and a Data Check – log book and purchase documents (both highly recommended) are your best protection against buying a used car with costly, hidden problems.
Auto Assured, Automobile Association of Kenya or any other professional assessor can carry out an independent inspection of the vehicle to ascertain its mechanical condition and to confirm if it is road worthy. The inspection will also give you an indication of the current market price. During the inspection documents will be checked and verified against the actual information on the vehicle.
What the Technician /Mechanics inspection should entail
- Body Exterior Inspection: To establish whether the vehicle had been involved in any previous accidents, quality of repair, paint work condition, rust and/or corrosion, lighting system, upholstery and general car aesthetics. The windscreen and body mirrors are checked and identified as to whether they are heated or not.
- Electrical /Controls:- These include inspection of Electrical controls in the motor vehicle that control lights , mirrors, Heaters, Fans, windows, sun roof, wipers, washes etc
- Interior Luggage Compartment:- This is inspection of the interior of the motor vehicle, steering wheel adjustments, seat adjustments, seatbelts
- Condition of the Tyres and the Rims:-The types of material and size of the rims are indicated.
- Engine and chassis numbers are taken and compared with the logbook details
- Supplementary road test: This is done after pit inspection. It aims at identifying the effects of bad components identified by the pit inspection on the general handling of the vehicle.
PRICES
After final vehicle selection, Narrow down the choices and figure out a reasonable price.
- Compare different prices from various dealers for specific models to establish from various resources available – automotive newsletters and magazines available from the local news stand , the internet , classifieds in the local dailies etc
- Compare prices of new vies a vie used vehicles to help establish what price range is within your budget.
- Haggle Expect to reduce the asking price by several hundred thousands, and you are aware of cheaper deals. If the dealer tries to tempt you with a free stereo or other perks and accessories, you can always buy those yourself. Go for warranties like extended warranties and offers on insurance and road rescue policies.
FINANCING
How to Get Hire Purchase Information:-
Shop around for financiers and their various offerings. This is comprehensive asset finance information for new or used vehicles. Sources of this – most local banks offer asset finance as well as microfinance institutions or cooperatives.
Financing Options :-
- Loans and leases involve renting money. What's your best option? Do you belong to a Sacco, borrow from your employer, borrow from a bank, borrow from family or friends, the list is endless.
- Leasing Explained - Leasing is a good idea for businesses, salespeople, or people who can deduct the payments on their taxes. Leasing offers lower payments than conventional financing talk to your bank today and find out more on leasing.
WARRANTIES EXPLAINED
This is an agreement or undertaking by a seller to be responsible for present or future losses of the purchaser (you) occasioned by deficiency or defect in the quality, condition or quantity of the car. This is provided for in a legal document in a deed, lease or other instrument conveying or transferring of ownership under which the seller becomes liable to the purchaser for defects in the car.
This mostly applies to new cars, however some dealers who do direct importation offer extended warranties. Get the specific detail on this.
SHOPPING FOR INSURANCE
Don't sign anything until you find out what your insurance costs will be. Before you buy, get a quote on the car you want from a reputable insurance broker or agent who represents many different firms. Look for comprehensive policies that accommodate your lifestyle and travel habits especially aspects such as road rescue. Also look out for the policy exclusions so as to be fully informed on what you are buying. The difference in premiums between insurance companies can be staggering!
DELIVERY
When Arranging for collection or delivery of the vehicle from the dealer/seller, ensure that you carry your inspection report to ensure that any additions agreed on with the dealer/seller are honoured and in cases where minor repairs or replacement are to be done , you verify that they have been done. Also ensure that you receive all the vehicles documents for purposes of insurance and ownership registrations i.e. log book transfer. The seller must sign the transfer forms transferring the vehicle ownership to you, allowing you to process the transfer at Kenya Revenue Authority.
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