📅 Category: Financing & Ownership | By: Clyde Motors KE | ⏱ 5 min read
For many Kenyans, buying a car outright with cash is not the most practical option — and it does not need to be. Car financing allows you to drive away in your ideal vehicle today while spreading the cost over an agreed period. At Clyde Motors, we work with financing options that are straightforward, transparent, and designed to make car ownership accessible.
In this post, we walk you through exactly how car financing works in Kenya, what you need to qualify, and how the process unfolds from your first enquiry to the moment you collect your keys.
What is Car Financing?
Car financing — also called a car loan or hire purchase — is an arrangement where a financial institution (a bank or microfinance lender) pays for the vehicle on your behalf, and you repay them in monthly instalments over an agreed period, typically between 12 and 60 months. The vehicle acts as security for the loan, and once you have completed all repayments, full ownership transfers to you.
It is a widely used and well-established arrangement in Kenya, and the majority of our clients at Clyde Motors who use financing find the process straightforward once they understand the steps involved.
Step 1: Decide on Your Budget and Preferred Vehicle
Before approaching any lender, the most important step is deciding what monthly repayment you can comfortably afford. A common and sensible guideline is that your car loan repayment should not exceed 20–25% of your monthly net income.
Once you have a repayment figure in mind, you can work backwards to understand what loan amount that corresponds to — and therefore what price range of vehicle you should be looking at.
At Clyde Motors, we are happy to assist you with this calculation before you begin the formal loan process. Talk to us and we will help you identify vehicles within your realistic budget range.
Step 2: Gather Your Documents
Kenyan lenders typically require the following documents to process a car loan:
- National ID or Passport (copy and original)
- KRA PIN Certificate
- 3–6 months of bank statements showing regular income deposits
- 3 months of payslips (for salaried employees) or business financial records (for business owners)
- Certificate of Employment or letter from your employer (for salaried applicants)
- Proof of residence (utility bill or tenancy agreement)
Having these documents ready before you begin speeds up the process significantly. Many loan applications are delayed not by the lender but by missing or incomplete documentation on the applicant’s side.
Step 3: Apply for Pre-Approval
With your documents ready, the next step is to approach a lender — whether your own bank, a dedicated vehicle financing institution, or a lender that Clyde Motors works with. The lender reviews your documents, assesses your creditworthiness, and provides a pre-approval letter indicating the maximum loan amount they are willing to offer.
This pre-approval is not yet a commitment to lend — it is a conditional indication. But it is an important step because it tells you with confidence what your budget ceiling is, allowing you to shop for a vehicle with clarity.
Step 4: Choose Your Vehicle at Clyde Motors
With your pre-approval in hand, visit Clyde Motors and choose your vehicle. We will provide you with a formal proforma invoice — an official document showing the vehicle’s price, description, and our business details — which your lender requires to process the final loan.
At this stage, we also discuss the deposit. Most Kenyan lenders require a deposit of between 10% and 30% of the vehicle’s value. The higher your deposit, the lower your monthly repayments and the less interest you pay overall. If you have savings available, putting in a larger deposit is always the smarter financial move.
Step 5: Final Loan Approval and Disbursement
Your lender reviews the proforma invoice, finalises the loan amount, and upon approval, disburses the funds directly to Clyde Motors. This process typically takes between 3 and 10 working days depending on the lender and how complete your documentation is.
Once funds are received, we complete the vehicle registration transfer process and prepare the car for collection.
Step 6: Collect Your Keys
With the transaction complete, you come to our showroom on Kiambu Road, sign the final handover documentation, and drive away in your car. Monthly repayments begin as agreed with your lender, and we remain available to assist if you have any questions during the ownership period.
A Few Things to Keep in Mind
- Interest rates: Car loan interest rates in Kenya typically range from 13% to 18% per annum depending on the lender and your credit profile. Shop around and compare — the difference between lenders can be significant over a 48-month loan.
- Comprehensive insurance is mandatory: Any lender will require you to carry comprehensive insurance for the duration of the loan, as the vehicle is their security. Factor this cost into your monthly budget.
- Early repayment: Most lenders allow early settlement of the loan, sometimes with a penalty fee. Confirm the early settlement terms before signing.
- Your credit history matters: Lenders check your credit history through credit reference bureaus (CRBs). If you have outstanding loans or a history of late payments, address these before applying — they will affect both your approval chances and the interest rate offered.
Ready to Get Started?
At Clyde Motors, we have helped hundreds of Kenyans get into their ideal vehicle through financing, and we are glad to guide you through the process. Whether you are enquiring for the first time or ready to begin your application, our team is available to help.
👉 Visit clydemotors.co.ke, call or WhatsApp us on 0740635621, or come see us on Kiambu Road, Nairobi. Financing available on most vehicles in stock.