Automotive

Reasons Why Importing a Car in Kenya is Suddenly So Expensive

In the past few months, importing cars in Kenya has suddenly become more pricey. If you have been shopping for imported vehicles, you must have noticed the change. The story is the same for all types and categories of cars. However, the situation is worse for luxury cars as prices have gone up by at least a factor of two.

For a number of years, importing a car to Kenya has been popular because of the attractive and affordable prices. It was beneficial for people in many ways despite taking longer and being an overall more daunting process. However, it was preferred as people got good quality and affordable variety of vehicles.

People often disregard the idea of importing vehicles as they consider it risky and more complicated. However, these days, online auctions and online dealers provide a convenient way to import cars.

Unfortunately, due to various reasons, the price of imported cars has increased significantly. The increasing prices have affected people’s ability to import cars these days. The affordability of used cars for sale in Kenya was one of the primary reasons for importing cars. However, it’s no longer cheap enough to be viable now for many people.

We know there is confusion regarding the increase in prices. That is why we have listed some of the primary reasons that have led to the surge in prices. Read on to find out more.

5 Reasons for Increasing Prices of Importing a Car in Kenya

The Kenyans have a higher demand for used cars. People are looking for used cars for sale in Kenya because they are affordable and guarantee quality. The import of used vehicles from Japan has easily grabbed attention as these vehicles are a complete package.

For years, importing a car to Kenya has been cheaper than purchasing from the local dealers. Importing also provides more options and variety. You can easily compare and choose a vehicle that meets your needs. Also, the process is smooth to get a reputable and quality car.

The sudden rise in the price of imported vehicles has easily caught the attention of people and analysts. It is noted that not only luxury but C-class cars are also facing the same issue of rising prices.

So, you must be thinking about what’s causing this? Is this justified? Maybe importers are demanding more money from buyers? Or is it because of the global economic conditions? These are some of the common questions that people are asking.

For your knowledge, we have listed down the reasons behind the increasing prices:

1.    Rising Price of the Dollar

Everyone is aware of the fluctuation in the value of the dollar. But, unfortunately, it has not been very kind to the Kenyan currency.

For years, Kenya has been importing cars and making them available as used cars for sale in Kenya. They import from different foreign markets, which include the UK, Japan, and Singapore. Hence, the dollar is used for transactions.

As the exchange rate has increased, the Kenyans are required to pay more shillings. At pre-COVID times, an individual paid 100 shillings for a dollar. However, now it’s 106 to 100 for the same. As a result, the overall costs of importing a vehicle have increased.

2.    Transportation and Shipment Costs

With time, the overall costs of transportation and shipments of vehicles have increased. Everyone is aware of the impact of the COVID-19 pandemic on the economy and global trade conditions. The government announced lockdowns brought a major shift in industries.

These changes affected the ships too. For the transportation of vehicles, ships are the primary mode. Thus, the prices were affected as international shipping was stalled due to lockdowns in various parts of the world.

We have seen that here too, the law of demand and supply have affected the prices. For example, the demand for used cars for sale in Kenya has increased. However, the supply is limited. Also, the ships available for the trade are limited due to previously mentioned lockdowns around the globe.

Hence, the freight operators are also charging more for the deliveries. As a result, the customers are suffering.

We all can see that things are getting normal again. However, the prices of vehicles are still skyrocketing.

3.    Decreasing Supply

Along with the increasing dollar price, the decline in supply has also affected the price of vehicles imported to Kenya.

We have seen that the exporters of vehicles are demanding higher prices. Due to the pandemic outbreak, it has been seen that people in the export countries haven’t upgraded their cars. They are using the same cars because of financial constraints.

As a result, the supply has diminished, and there is a shortage of vehicles for exports, affecting the imports to different countries like Kenya. Overall, the imbalance in trade is one of the reasons that has led to the increase in the prices of used cars.

4.    To Boost the Local Auto Industry

In recent years, Kenya has realized that the import of used and new vehicles has affected the sales of the local dealers and distributors. Hence, they are trying to boost their automobile industry. To achieve this, they are making imports harder.

If you are looking for used cars for sale in Kenya, there are chances that you will find the local ones more. That’s because the overall costs of shipping vehicles have increased by 40%. The price change has been prominent between 2010 and 2015.

Along with this, it has been seen that the Government of Kenya has also announced an additional tax on imports of vehicles. All this has turned out to be bad news for buyers looking for used cars for sale in Kenya.

5.    To Cut Emissions

The Government of Kenya, like other countries, is trying to curb the import of used cars from Japan. It is because they are trying to promote a greener and healthier environment. However, the increasing number of automobiles has led to a surge in the emissions that harm nature. Hence, it has become vital to take action to reduce the impact.

All of these measures have led to a sudden surge in prices. It is expected that the higher prices will affect the costs of importing vehicles more in the coming years.

Final Thoughts

The COVID-19 pandemic outbreak is one of the key reasons for the sudden increase in prices. Now, getting used cars for sale in Kenya at affordable prices has become a major challenge.

Overall, the demand has increased while the supply has declined. The imbalance has resulted in higher costs of importing vehicles to Kenya.

If the dollar exchange rate and government policies remain the same in the coming years, it is expected that the import of used vehicles will become more challenging.

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