Kenya Imposes 35% Import Duty On Foreign-Used Cars, Time To Think Locally-Used?

According to media reports, Kenyans looking to import foreign-used cars will have to dig deeper into their pockets as the import duty tax just increased from 25% to 35%. This change is instigated by the  East African Community (EAC) approving an application by Kenya to raise the duty on motor vehicles under the common external tariff. The new duty went into effect on July 1st. 

The new tariff will result in an increase in the price of imported cars, especially station wagons, racing cars, commercial trucks, and passenger vehicles that carry more than 10 people. Kenyan car buyers will pay more to import cars compared to their counterparts in Uganda and Rwanda who will only have to pay 15% and 25% respectively. 

Robert Waruiru, the chairperson of the Institute of Certified Public Accountants of Kenya Public Finance Committee, said the increase in import duty will translate into about a 14% hike in the price of foreign-used cars. 

Time to Shift to Locally-Used Cars?

Importers who spoke to the Business Daily said that the review will likely see prices of imported cars increase by hundreds of thousands of shillings. 

With the rising cost of living, an increase in the cost of importing a car will be a major stumbling block to Kenyans dreaming of owning a car. The increased rates will also have a multiplier effect and boil over into higher insurance and maintenance costs. 

But it’s not all gloom as buyers can shift their attention to locally-used cars which are more affordable than imported ones. 

Benefits of Buying a Locally-Used Car

Is it a good idea to buy a locally-used car? 

The new import duty, combined with rising inflation, will only make imported cars more expensive. In addition to the 35 % import duty, car buyers who opt for foreign-used also have to pay a 20% excise duty, 16% VAT, a 2% import declaration fee, a 1.5% railway development levy, and freight charges (CIF). 

Finance-wise, a locally-used car is the best (cheaper) option in this case. A foreign-used vehicle may end up costing you double its original price.

You may also incur additional costs to customize your imported car for Kenyan roads. For example, Kenya doesn’t allow the importation of left-hand drive vehicles for personal use. Therefore, if you’re hoping to import a foreign-used car, you’ll have to pay for the customization to change the vehicle to a right-hand drive vehicle. Purchasing a locally-used car will avoid these additional costs and mechanical changes.  For example, foreign-used cars from foreign markets often have major mechanical differences from those in Kenya. You won’t have to worry about customization when buying a locally-used car. 

Lastly, you can only import a car that’s less than eight years old from the year of first registration. This limits you to vehicles from 2015 and above. If you’re an old-school enthusiast, the only way to own a vehicle of your choice is to find a locally-used car. 

Buy a Locally-Used Car from Peach Cars

You can get locally-used cars at cheaper prices, especially now that import and shipping costs are going to increase the prices of foreign-used cars. Buying a locally-used car is a great way to own a car without shelling out as much as you would for a foreign-used one. If you find the right locally-used car (a peach), the thrill and contentment are the same as for an imported car. 

Find your peach today, buy a locally-used car from Peach Cars.