Second-hand car dealerships are common in our major towns. With the assistance of the internet and social media this business has been extended online right into living rooms.
Over the past decade, there has been growing demand for used vehicles, especially saloon cars, with at least 70,000 such vehicles entering the Kenyan market yearly.
Over 70 percent of these are sourced from Japan and the rest from a variety of places including Dubai, the UK and South Africa.
Though subject to duties and taxes levied at the Mombasa port, the vehicles have high demand since their overall gross price is significantly lower than their new equivalent. That has seen more players enter the market. The stiff competition has affected prices, forcing some dealers to resort to unscrupulous practices such as tampering with odometers.
Intentionally winding back a car’s mileage, or ‘clocking’, is done to make the vehicle appear less used so as to attract higher resale prices and thus increase the profit margins. In fact, by clocking the odometer by 50,000 kilometers or more, a seller can increase its value by tens of thousands of shillings.
So, why should we be concerned about this? Putting vehicles with false mileage readings on the road not only cons the buyer into believing that they have a newer car with a higher value but also endangers lives as the vehicle may not have received the correct level of servicing needed to continue running safely.
For a customer who has taken out a car loan from a bank, frequent breakdowns and spare part replacements can lead to higher maintenance costs, potentially jeopardizing the ability to service and repay loans. This has sometimes led to customers defaulting on their loans with the vehicles being abandoned and repossessed.
However, not all second-hand vehicle dealers are into the practice; some are reputable.
On average, vehicles travel 10,000km to 15,000km per year, sometimes up to 20,000km. In Japan, vehicles are used for about eight years before being sold at the various auctions, from where the majority of second-hand vehicles in Kenya are sourced. Therefore, the mileage, on average, should be around 80,000km. Should a buyer get an eight-year-old vehicle with less mileage, say 20,000 km, they should exercise caution.
Buyers should also look at the general wear and tear signs on moveable parts such as pedal rubbers, steering wheels, seats and gear knob, among other small objects inside the vehicle. This will give the potential buyer a good indication as to the likely mileage that should appear on the odometer.
Clocking needs to be addressed to enhance transparency and safety in the industry as well as provide a level playing field for dealers.
There are mechanisms and independent websites that can help with verifying the mileage at the point of export of a vehicle by using the chassis number. This enables buyers to get the true value for money. The most commonly used website is https://www.qisjp.co.uk/verify-mileage.php, which anyone can access free of charge, or, locally, CarDuka’s carduka.co.ke.
With the right consumer protection measures and awareness in place to combat clocking, many consumers would be protected.
Mr Dodd is an Executive Director at NIC Bank.