The cost of owning a car

IMON ANYONA

A car tops the list of the most desirable assets for many families worldwide. It is a symbol of status and a means of convenience. While there are many other desired family assets — for example a home, and land— most often they are secondary, especially since they require huge capital to acquire or put up. Hence, a car is the most affordable and attractive initial option, but many realise, only too late, that owning and maintaining it takes a lot more than they signed up for.

Most of these costs are usually unforeseen and could put many first–time car owners into deep financial crisis.

Take the example of a car costing Sh600,000. Here are some of the inevitable creepy costs that come with keeping it.

Car insurance

It normally ranges between four to six per cent the value of the vehicle depending on the company, terms of contract and the valuation company, who for some reason, always overvalue the car. The result is an unforeseen additional cost of Sh30,000. Most times, the previous owner lets you drive around for a few days on their insurance but the potential risks involved put undue pressure to quickly purchase your own.

Parking fees

It has an effect on the monthly cash flow especially for those without essential privileges like VIP parking stickers or access to basement parking lots. In Nairobi, parking currently costs Sh140 per day; sounds small and manageable but the basic truth is that the small costs we incur on a daily basis are worse than large one-off costs. This brings in an extra and recurrent expenditure of Sh3,500 per month. Sundays are normally free.

Maintenance

An average Kenyan car will be due for service every two to three months. A visit to the clinic (garage) will see you buy an air cleaner or element (priced at Sh400), fuel filter (Sh800), oil filter (Sh800), one gallon of oil (Sh1,400), plugs (Sh1,000) and brake fluid (Sh400). These totals to about Sh5,000 — price estimates are for a regular saloon car at backstreet prices. Labour or chai for the mechanic is not inclusive and the thing about a car is that there will always be something else that needs replacement. Thus, an average of four car service sessions per year will set you back by at least Sh24,000.

Image is everything

No one wants to drive a plain car. Usually, the previous owners ensure that they strip the vehicle of all tantalising features. Initially, the desire is just to own a car; after owning the car you realise that it is the only one in the parking lot without sparkling alloy rims and tints. Then, your friends will ask where your CD player is — the response that you are still shopping for a good one becomes monotonous. A car wash at least twice per week and three times during the rains will put a Sh600 - 1,000 dent in the already strained wallet.

Fuel costs

One needs to factor an extra 50 – 70 per cent more than what you would have spent on bus fare. Car pooling often fails because the car gives a sense of convenience, making running around easy.

Acquisition costs:

Buying a car through credit brings in two major costs in your monthly budget; maintaining the car and repaying the loan. Following our example, a loan of Sh600,000 repayable in three years will require an approximate repayment of Sh18,500 in monthly instalments.

From the above summary, it figures that a car could spend upto Sh450,000 per year on the basic requirements. This is the average cost of maintaining a car annually.