Prices of used vehicles such as Subaru Impreza, Toyota Vitz and Volkswagen Golf have increased by hundreds of thousands of shillings on scarcity and weakening of the local currency.
The rally has cut sales for roadside car dealers and priced out a large section of professionals and small business owners who are major customers of second-hand cars.
Market dynamics have also increased interest in much older cars, slowing down their depreciation as price-sensitive buyers seek models within their budget.
Car dealers say the prices of cars assembled in 2016 –which is what they are largely importing now based on the eight-year age limit— have gone up by up to Sh400,000 on certain models compared to last year.
A used Subaru Impreza is now retailing at Sh1.7 million, rising from Sh1.35 million last year.
Over the same period, the price of a Toyota Vitz has increased to Sh1.3 million from Sh1.1 million.
A Volkswagen Golf has seen its price jump to Sh1.8 million from Sh1.4 million. There are now few eight-year-old cars going for less than Sh1 million, entrenching car ownership as one of the markers of the middle class.
Mr Charles Munyori, secretary general of the Kenya Auto Bazaar Association, which represents used car dealers, said there is a rise in demand for vehicles against few units that are available for sale.
“There has been high demand against fewer units in Japan, this, coupled with a weakening shilling has had a significant impact on price,” Mr Munyori told the Business Daily.
A Toyota Premio made in 2016 is retailing at Sh2.2 million, up from Sh1.8 million last year. A similar-aged Toyota Fielder has seen its price jump to Sh1.6 million from Sh1.3 million.
Production of cars slowed down globally in the wake of the disruption caused by the Covid-19 pandemic besides shortages of semiconductors, which are a critical component in modern vehicles.
The shilling also weakened substantially, raising the cost of cars and other imported goods which are paid for primarily in US dollars.
The local unit has fallen 9.08 percent in the past 12 months alone to trade at Sh125.4 against the greenback.
Mr Munyori said the high prices of imported second-hand cars have also affected the cost of locally used models as more people avoid selling their cars for fear of having to part with more money in buying the imported ones.
“The supply of locally used vehicles is very limited at the moment as people tend to maintain and keep their old cars other than selling them to purchase another one at a higher price,” he said.
He said the high prices will continue to be witnessed in the current quarter but there might be a reprieve in the coming two months as the supply of second-hand vehicles at the auctions overseas is projected to improve.
