Bank vs SACCO vs Dealer Financing

Buying a car in Kenya has never been easier—or more complex. In 2025, Kenyans can choose from a wide range of financing options, including bank loans, SACCO credit, dealer financing, logbook loans, and asset finance. Each option comes with its own perks, risks, and eligibility requirements.

This guide compares the top car loan options to help you choose the best fit for your budget, lifestyle, and credit profile.

1. Bank Car Loans

Overview:

Banks offer structured car loans for both new and used vehicles, often with longer repayment periods and competitive interest rates.

Top Banks:

• Absa Bank – Up to 100% financing for new cars; 75% for used cars; up to 48 months repayment
• KCB Bank – Up to 72 months repayment; interest ~13%; requires active account and security
• NCBA Bank – Fast approval (12 hours); insurance premium financing included
• I&M Bank – Up to 80% financing; cars up to 8 years old; repayment up to 48 months

Pros:

• Lower interest rates (12%–18%)
• Longer repayment terms (up to 6 years)
• Insurance bundling and dealer partnerships

Cons:

• Requires good credit history
• May need collateral or deposit
• Slower approval for self-employed applicants

2. SACCO Car Loans

Overview:

SACCOs offer affordable loans to members, often with lower interest rates and flexible collateral rules.

Popular SACCOs:

• Stima SACCO – 12.75% reducing balance; up to 3x savings; self-guarantee option
• Safaricom SACCO – 12% interest; logbook as security; no guarantors needed
• Waumini SACCO – 14% interest; up to 4x savings; logbook or guarantor required

Pros:

• Lower interest rates (8%–14%)
• Flexible collateral (shares, logbook, guarantors)
• Community-based support

Cons:

• Must be a member (3–6 months minimum)
• Loan amount tied to savings
• Slower processing for large loans

3. Dealer Financing & Hire Purchase

Overview:

Car dealerships offer in-house financing or partner with banks to provide structured payment plans.

Examples:

• Maridady Motors – Up to 50% financing; balance payable over 24 months
• Toyota Kenya – Financing for new models via bank partnerships
• Autochek Kenya – Flexible plans for used cars

Pros:

• Immediate vehicle access
• Minimal paperwork
• Tailored to specific car models

Cons:

• Higher interest rates (12%–18%)
• Limited lender choice
• May require large deposit (10%–50%)

4. Logbook Loans

Overview:

Use your existing car as collateral to borrow up to 80% of its value.

Providers:

• Mwananchi Credit
• Platinum Credit
• FinCredit

Pros:

• Fast approval (24–48 hours)
• No need to sell your car
• Useful for emergency cash

Cons:

• High interest rates (15%–30%)
• Risk of repossession
• Short repayment periods

5. Asset Finance Companies

Overview:

Specialized lenders offer car loans with flexible terms for personal and business vehicles.

Providers:

• MOGO Kenya – Up to KSh 2.5M; 20% deposit; 60-month repayment
• Maisha Microfinance – Business vehicle loans
• Car & General Financing – Commercial vehicle support

Pros:

• Fast approval
• Tailored for informal sector
• Covers boda bodas, matatus, pickups

Cons:

• Higher interest rates (14%–36%)
• Deposit required
• Strict repayment schedules

Summary Comparison

Financing Type	Interest Rate	Repayment Term	Deposit Needed	Best For
Bank Loans	12%–18%	Up to 6 years	Often required	Salaried & self-employed buyers
SACCO Loans	8%–14%	Up to 6 years	Based on savings	SACCO members & low-income earners
Dealer Financing	12%–18%	1–2 years	10%–50%	Quick access & showroom buyers
Logbook Loans	15%–30%	1–3 years	No deposit	Car owners needing fast cash
Asset Finance	14%–36%	Up to 5 years	20%–30%	Informal sector & SMEs

Final Thoughts

If you’re buying a car in Kenya in 2025, start by comparing total cost of credit, not just interest rates. For salaried buyers, banks like KCB, NCBA, and Absa offer solid options. SACCOs are ideal for community-based lending, while dealer financing suits buyers who want speed and convenience. Already own a car? A logbook loan might unlock quick capital—but tread carefully.