Dealers say costs have been easing since start of the year, offering relief to price-sensitive Kenyans who opt for used cars.
The Kenyan prices of some popular brands of imported second-hand cars have dropped by double-digits between January and this month, driven by the shilling’s rally against the dollar.
Dealers said that prices have been easing since the start of the year, offering relief to price-sensitive Kenyans who opt for the used units.
The official exchange rate from the Central Bank of Kenya (CBK) shows that the shilling exchanged at 128.67 units to the greenback compared to 160.8 units as of January.
A 2017 Landcruiser Prado TX for instance now goes for Ksh4.5 million ($0.036 million) compared to Ksh5.3 million ($0.0424m) at the start of the year, or a 17.7 percent drop, while a used 2017 Subaru Outback is now retailing at Ksh2.5 million ($ 0.02m), down from Ksh3 million ($0.024m) in January-a 16.6 percent drop.
The price drops offer relief to Kenyans who had been forced to shelve purchases of second-hand cars last year when prices skyrocketed amid the shilling’s woes against the dollar.
“Prices have gone down because of the shilling’s recovery against the dollar,” Cindy Ndeda, marketing manager at the Kenyan office of SBT Japan said.
“We have seen price drops as a result of how the shilling has gained against the dollar,” Kenya Auto Bazaar Association secretary-general Charles Munyori.
The dollar is the currency used in Kenya to pay for imported goods, including motor vehicles, fuel, and furniture and a strengthening of the shilling has the impact of lowering the cost of the imports.
An official at Vozilo Motors, another car dealer in the city also said that prices of the units had dropped, singling out Nissan Note which now goes for Ksh850,000 ($6,576), down from Ksh1 million ($7,736) at the close of the year.
A Mercedes Benz C200 is going for Ksh3 million ($23,210) compared to Ksh3.5 million ($27,079) while a Nissan X-Trail is retailing at Ksh2 million ($0.016m), a drop from the Ksh2.3 million ($0.0184m) at the start of the year.
Falling prices offer a major boost to dealers who have since last year grappled with low sales as prices of the units soared in the wake of the shilling’s woes against the dollar. The shilling had been on a free-fall since 2021, directly affecting prices of imported goods such as used cars and petroleum products.
Prices of second-hand cars had surged by upwards of Ksh600,000 ($0.0048m) in the last four months of 2023, underscoring the impact of the shilling’s woes.
Dealers had earlier projected that prices of imported second-hand cars would drop in the wake of the shilling’s rally against the dollar.
Japan is the single biggest source of second-hand cars in Kenya, with the popularity of the units driven by their low prices relative to the new cars.
Second-hand cars are popular in Kenya due to their low prices compared to the new motor vehicles. The United Kingdom is another source of used cars imported into Kenya.
Kenya allows importation of second-hand cars within an eight-year age limit, meaning that used units that were manufactured before 2017 are barred from being imported into the local market.