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Reasons to avoid bank finance car loan

An ability to avoid mistakes in finances is what differentiates those who are earning interest from years of savings and those who are locked into paying debt for the next five years or so.

You came here for a solution and not a reminder of the good reality or the sad fate.

Do something today, such as creating a thing, or working on a job, which you can thank yourself in future.

Take the step to avoid a financial mistake, and you will have done the equivalent of working to correct the mistake in future.

  • Avoid getting into debt to buy a car right now.
  • Save for a year.
  • Get the car by paying cash.
  • The rest of the three years or four years you would spend in debt are worth something else.

You will thank yourself when you get the car for cash.
You will thank yourself for the decision you too just now.

The hidden charges of car loans in Kenya

People who use bank financing to buy cars through an arrangement by the car dealer in Nairobi end up also losing money in the following ways, other than the interest.

You have to pay 2.5% of the loan amount as facilitation fee. If a bank like stanchart, nic, stanbic, kcb, equity etc is offering the loan.

You have to pay Ksh 3000 or thereabout as facilitation fee for the loan

You have to pay the price at about Ksh 100,000 extra because the seller is taking advantage of your lack of cash. (You cannot bargain the buying price)

You have to pay for tracking, from a pre-approved supplier. It will be about Ksh 28,000 for 4 years, which is the duration of your loan.

You have to pay for depreciation indirectly. The car will lose at least 30% of its value as soon as you drive away from the used car yard, or the new car show room.

You have to pay for comprehensive insurance, at about 4% the value of the car.

Here is the math. If you are to buy a car such as Mazda demio, which is popular in Kenya because of the Uber business in Nairobi, then you will lose about 150k before accounting for interest payments.

[You paid higher for the purchase + comprehensive insurance + loan processing + tracking + facilitation fee]

Illustrative Example – Buying Mazda Demio

Alternatively, you can save to about ksh 350k and buy a Mazda demio, the previous generation, and get to drive it for another Ksh 60k to 80k with few problems other than regular maintenance. Besides, you can get a much cheaper car at Ksh 300k and then spend the extra 50k fixing it up with stuff from other used car available at any Jua Kali garage market throughout the city, if that is what you want.

New (used) car – Mazda Demio (2011)

For Sale OLX Kenya, Mazda Demio, YOM 2011, price Ksh, 750,000

What you pay by bank financing arranged by car yard dealer:

  • Deposit 30% = 225,000
  • Facilitation = 3,000
  • Insurance 4% = 30,000
  • Tracking = 28,000
  • Loan processing 2.5% = 13,125
  • Principal loan amount = 600,000
  • Interest on loan is 14% annually (calculated on reducing balance)
  • Total, the least amount you have to pay to leave with the car = 286,000/=
  • Do not forget the 13,125 or 2.5% deducted or added to your money due. Thus, your balance is the 600000 loan + interest spread over 48 months

Used Car, Mazda Demio

For Sale OLX Kenya, Mazda Demio, YOM 2008, price Ksh 330,000

What you pay with your savings after waiting for a year

  • Purchase price 330,000
  • Interest = zero
  • insurance 4% for comprehensive (optional) = 13,200 or third-party insurance = 7000
  • car service ([email protected] each, plugs @1500, oil @2000 – 3000, suspensions (optional) etc.
  • Total with all options included = about 363,000/=

The difference between what you would raise before getting the car on loan and what you would pay to get the other used car is about Ksh 77,000 give or take.

Of course, if you are getting the car, and the owner is true to his/her word that it is a buy, fuel, and drive, then you will pay close to 335,000 for the used car. And the difference in this case drops to 49,000 only.

Now think hard and good about raising Ksh 286,000 to get the bank financed car, and struggle with about Ksh 14,000 as monthly payment for the next four years. In that period, your counterpart, the person who went with option B, will have probably also spent or saved a similar amount of a monthly basis. If her or she saved, then she will be about 600 in positive net worth & you will be at zero having cleared your debt.

The high mileage question

The financed car will likely be anything between 40,000km to 90,000km while the used car bought on cash at that price is likely about 140,000km to 160,000km. You can use the car comfortably for all the kilometers before 200,000k. The Mazda Demio in particular is a strong and well-built car and it can go to 300,000km with tender loving care.


Do not finance your car. Save and buy cash. Cash is king in many ways. You avoid many hidden charges. You get a good car whose depreciation is not as much as the newer car.

You are free to do what you like with the 14,000 monthly savings arising from your wise financial decision.

I threw beats by dre outside

I bought Beats by Dre headphones a few years ago.

This morning I threw them out with the trash. I realized they were sitting in their pouch for about 6 years not doing me any service. The money I used to buy them is gone and never to come back. The headphones did not serve me. They were faulty and I did not buy them at an official shop. I could not return them. I am wiser now. I know such loose change should better go to investments or risky gambles.

If they do not pay then it was worth a try. When they pay off, you double your money.

No such thing as a successful dreamer. Work is King.

If there, is something you need to do then you should do it.

You might be thinking about it and wishing it done, but that is not the same as doing it.

Get into a habit of doing things.

Think about them but do them still.

Thinking about work is easy.

Doing work is not easy.

Thinking about success is easy.

Becoming successful is not easy.

Thinking about a perfect day is easy.

Having a perfect day is easy.

A perfect day is the one where you catch yourself daydreaming, procrastinating, and you turn yourself into a productive machine.

No one said you have to climb a mountain.

A successful day is all about a few positive steps taken consistently.

Some work here and there, done in a meaningful way is all you need.

The jobs you do compound fast, and in a few months or years, the gains you made will multiply.

Impressions matter: Tell yourself this now

If someone does not find you desirable, they will find you ease to accuse. Most people do not know this issue, but the most beautiful of handsome people around us tend to get away with mistakes. They can do a shoddy job at work, and they get a pass.

Some beautiful ladies got a second look at their exams after the marketing was done because they impress the professor nuts with their cleavage and smile.

You can not change this aspect of human behavior but who are you not to use it to your advantage. People are going by their internal judgment of the situation and other people. If a girl you like seems too hot, then you will probably self-jeopardize your capabilities of being with her.

On the other hand, the same rarely happens when a girl like you, only that you might be ignoring the shit out of her. The important thing is to learn the dynamics of the sexes and to make them work to your advantage.

You can change, but you have an inherent problem with the thought of what you are doing being right. It might or it might not. Try not to think of it that way. You should be concentrating on tips that work. Of course, a person who is already earning interest from investments knows the importance of making those investments. However, try telling that to the broke and in a debated guy, and it all seems foreign.

I know these things feel foreign to you since the last time you had your way with people and impressed them was before Jesus, which is to say never. Get back your cool and bring back the old days when you did not care about anything except for what you want.

Do what the pros do

People mirror themselves against others. Someone else whom you seem to influence is probably mirroring your actions. Observe yourself and others in your surroundings.

You will tend to notice some similarities.

Do you see people sounding the same, using similar words, wearing similar clothes and somehow having the same posture after hanging out together frequently? You probably see in campus, students taking a particular course behaving similarly. You can tell this is a nerd and this is not one. Such are the outcomes of public mimicry.

It can be a good thing for your success.

On the other hand, it could mean you are being too much of a beta male. Time to stop it and get other improved postures, wordings, habits and so on.

see it enough times, start doing it

The rat race in one picture

What is wrong with this picture?

Men wearing designer hats, or would I say corporate mass branded hats and all holding up their iPhones for a shot of Tiger Woods. Men living their excitement and thrill though another person’s story.

Men who are consumers and all lined up to do what they do best. Consumer so that others can see them consuming, and see them as superfluous socially.
This activity and this picture are the definition of the rat race.

Why you need to learn a new skill ASAP

Learn a skill that will help you. Many people today attend motivational seminars that are not going to help these.

These are types of masturbatory activities for the brain. You fool your brain into thinking you are doing so much work. In reality, you are just hyping yourself. See people on Sunday and the way they behave.

They talk as though they are going to conquer the world, just because someone in a sermon yesterday told them that were true.

The reality keeps happening irrespective of what these people think. Therefore, they shall continue waiting for the paycheck and keep doing their jobs.

They will work hard for their boss and believe they are on a path to prosperity and a million shillings saved.

However, if you lack skills, then you are not living. You merely exist. Skills such as copywriting help you a lot. A skill such as essay writing online can get you extra income.

A skill such as walking dogs or being an escort can get you clients and a financial future. Try learning a skill and making yourself good at it.

Habits will make you successful and bring you money while saving you from broke

The tiny things you do repeatedly become you. The waking up early yesterday today and tomorrow is just an example. The days when you used to eat only one breakfast meal and used the rest of the day to get ahead; that was you.

Each thing you do now is making you prosper or derailing you. If you want money then you have to be in the habit of doing things that bring money. A low paying job does not bring money; a high paying job brings money. A high debt gets money away while a low one still gets money away from your pocket.

Avoid the M-shuari, Tala, Timiza, Branch, Saida, and all the bank advances unless they are going to aid your cash flow and cause you to get more money, without paying too much for it.

Habits today and tomorrow; always remember they make you into what you are now, and what you shall be in future.

stop trying to teach people success

A definite result of teaching people success is the apparent reminder of their loser mindsets and failures in life. Focusing on success is like focusing on goals, and it only leads to unhappiness.

Teaching people about success is bad. It makes them think more about the inadequacies they need to get over. They become anxious about winning in life and comparing with everyone in life. We sometimes do it here at ILEBET and realize that we could be leading you astray. We get you so worked up without being honest regarding our expectations for you.

We are not angels. We notice there is a feedback loop that could start right now with advice on being a successful person, then ends up with you beating up yourself for being a loser and failing to live up to the idea of an elitist mindset. Success is not bad, but fixating your life’s meaning upon being successful is the worst thing you can do in your lifetime.

MyNoise – An understated productivity tool

MyNoise app that is also available on the website is a nifty productivity tool for high achievers. It is a binaural beat generate and noise generator engine that will help you relax or focus on your work. It gets your brain active early in the morning and makes it sleep when you want it to. Read more

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