Co-operative Bank has launched a credit facility for purchasing used cars, giving a major lift for thousands of Kenyans aspiring to have their own vehicles.
Co-op Bank says it will be funding up to 100% for those seeking to buy private pre-owned motor vehicles, at a time when a car has become a necessity due to the chaotic public transport system in the country.
“Anyone with an income can walk into a second-hand car dealership, select the vehicle that best suits them, and get financing from Co-operative Bank,” the banks says.
One of the loan’s conditions is that the car has to be a maximum of eight years old to ensure that the customer gets value for money. The repayment period of the credit facility ranges between 60 months to 96 months, with the vehicle being purchased acting as the security.
The product is part of Co-op Bank Asset Finance, the self-securing loan product for the financing of moveable assets. Asset financing offers great flexibility and helps applicants free up cash by enabling them to acquire more assets.
The pre-owned cars credit-line has very flexible requirements: you just need a copy of national ID card and KRA PIN certificate, an introduction letter from your employer as well as last three months’ pay slips and six months’ bank statements for those not banking with Cooperative Bank.
The rest of the paperwork includes normal documentation and due diligence procedures such as copies of employment contract, or letter of appointment, motor vehicle sale agreement/proforma invoice, copy of logbook/import documents/NTSA search records and valuation report from Co-op Bank approved valuer, among others.
Industry figures show that Kenya imports 7,000-9,000 units of used cars a month, mainly from Japan, United Arab Emirates, United Kingdom, Singapore and South Africa. More Kenyans are opting for pre-owned cars as the cost of new cars has shot beyond the reach of many Kenyans with average incomes.
And now Co-op Bank has not only extended the financing to local dealers, but also expanded the credit facility to cover the full price of the car.
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