Some of the sporty and flashy cars with high price tags that Kenyans die to have could be old cars refurbished and reimported into the country as new.
Car lovers have claimed that a new trend is emerging in Kenya's auto industry where businessmen dupe Kenyans into spending millions acquiring grounded vehicles that were refurbished.
Experts claim the vehicles, normally bought in auctions or from junkyards at throwaway prices, get major body works and engine overhauls before being shipped back as new to be sold to unsuspecting buyers.
"It's a very lucrative business as some only look at grounded cars as broken spare parts while others view them as a gold mine," content creator Patrick from the Pamurick show stated.
Government ministries, agencies, and departments as well as counties conduct auctions of old cars from time to time. Banks and other financial institutions also take and sell cars from people who fail to repay loans.
These are some of the vehicles that some businessmen take advantage of to make millions from motorists who look for cheap high-end cars.
While some export the vehicle for overhauls, others do it locally and then sell the machines on popular online platforms.
This option helps them avoid import duty as well as port clearance procedures which can be hectic and increase costs.
The trend is not entirely new as local mechanics have been refurbishing old cars for years.
Antony Mbugua, a mechanic from Junkyard Auto Shop, transformed an old Subaru Forester and placed a price tag of Ksh1.5 million which is cheaper than some popular car models imported into the country.
He had also converted a Ksh1.5 million car into a Ksh4.5 million automobile for another client. Mbugua revealed that he charges between Ksh700,000 and Ksh800,000 for the entire facelift process.
Speaking to Kenyans.co.ke, Kenya Bureau of Standards (KEBS) Head of Quality Assurance, Bernard Nguyo revealed that all vehicles need to pass the KS15 15 guidelines before receiving clearance to be registered in Kenya.
"The bottom line for the vehicles being imported is that they need to pass the KEBS KS15 15 - Code of Practice for Inspection of Road Vehicles before clearance and registration. If it meets the requirement for that standard, it will be allowed and if it's rejected, then it's tagged for destruction," he explained.
The code outlines three criteria for vehicles; age limit (the machine's year of manufacture should not be more than eight years old), left-hand drive ( no left-hand drive vehicle is allowed for registration unless for special purposes such as Ambulances) and roadworthiness whereby the vehicle must pass the inspection test.
Car Importing Process
There are several procedures that one needs to follow before clearing a vehicle at Customs. This involves a licensed clearing agent who will process their declaration at the Kenya Revenue Authority (KRA) system.
The agent performs specific duties including lodging an import entry in the system, payment of duties as well as presenting all relevant documents for Customs.
The documents include an original commercial invoice, original bill of lading, import declaration logbook from the country of origin and certificate of road worthiness.
The import duty consists of 25 per cent of the customs value of the vehicle. Excise duty, on the other hand, is calculated as 20 per cent of the customs value for vehicles with 1500 cc and 25 per cent for those above 1,500 cc.
The Value Added Tax (VAT) is 16 per cent while Rail Development Levy is two per cent of the price.
