Kenyans To Trade Old Cars For New Ones In Mwananchi Credit’s New Loan Service
Mwananchi Credit Ltd has expanded its asset-financing loan service to include financing trade-in of cars.
Mwananchi Credit says the car trade-in loans targets car owners who wish to trade-in old cars for brand new ones. Under this arrangement, Mwananchi Credit pays the difference in price between the old and new vehicles upon which the car owner repays the loan in flexible installments.
“This solution takes the hassle out of trading-in or selling your old vehicle,” says Mwananchi Credit CEO Dennis Mombo. “Our asset financing facility enables you to trade in your existing vehicle for a new one at an authorised car dealership and we will settle the difference for you at a flexible interest rate and longer repayment period.”
A trade-in car is the vehicle offered to a dealership in exchange for credit towards the price of purchasing another, either new or second-hand. The trade-in purchase model significantly lowers the price of the new vehicle as well as monthly payments on a financed vehicle.
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Generally, the amount for the trade-in car – or what is called resale value – varies depending on a number of factors including the condition of the car, model and your negotiation skills.
The trade-in value is the amount a car dealer is willing to offer you towards the purchase price of a new or used car in exchange for your old car. Every vehicle has a trade-in value with the dealer, based on its market value.
And depending on the quality of your trade-in, the savings can be significant, running into tens of thousands of shillings. “The lower overall price also means a lower car payment if you’re financing the purchase,” says Mombo.
Effects of depreciation
The moment a new car leaves the yard, it begins to lose its value, through depreciation.
“When purchasing a new or used car, buyers should make every attempt to get the best possible price on their desired vehicle,” Mr Mombo says. “Incentives help lower the total cost of the vehicle significantly. Presenting a trade-in car at the time of purchase is arguably the best method of lowering the final price of a new vehicle. Take time and make sure you get the best deal out of the trade-in process.”
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What’s my car’s value?
Most trade-ins won’t get top value even if the car is in perfect condition because the price must always leave room for dealer profit on resale. Besides, few used cars will qualify for full market price. In avoiding the headaches that go with selling to a private party, the owner of the trade-in will receive an offer below the car’s actual resale value.
Typically, it’s minus any estimated repair costs, allowing the dealer to repair and resell the vehicle at a profit. This is when asset-financiers such as Mwananchi Credit come in to fund the difference in prices.
Things to put in mind
The trade-in value for most vehicles is negotiable. However, the buyer should know a few things before taking the trade-in vehicle to the dealer for an appraisal.
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“To get the best trade-in value possible, the vehicle should look its best,” Mombo says. “A cleaned and detailed car is worth more at trade-in than a worn and poorly maintained one. You should also make any minor repairs to the car that you can. Fixing windshield damage or minor engine issues before an appraisal by the dealer can net hundreds more on trade-in.”
The trade-in value that you receive for your old vehicle can equal instant savings which you can apply on a more luxurious model or simply add a few more options. Whatever your choice, trading in your existing vehicle is a good way to rid yourself of an old car and funding the difference though the flexible car trade-in loans from Mwananchi Credit.
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