A practical breakdown of my first car loan. Lessons in value, discipline, ownership costs, and long-term thinking.
Purchasing my first car, and especially at a relatively young age, was one of the most eye-opening financial decision I ever made. Contrary to many cases where people save for years or approach dealerships and car yards for long term payment options, my car ownership journey started on a rather unique path. My then employer financed the purchase.
At that time, I was working for a company that believed not only in supporting its stuff members to grow, but also trusted us enough to extend such substantial financial assistance.
After identifying the car and getting comfortable with the pricing, I submitted a typed, printed, and signed letter of request to my employer asking for financial support to purchase it. That may sound a bit old school now but back then, this is how things mostly ran. The formal approach was completely normal and for me it laid the groundwork for everything that followed in the process.
My employer then responded with a formal letter of acceptance and broke down the terms of payment, and spreading the payment across four years. What was even more heartwarming was that they also paid my first insurance premium in full for one year. This was incredibly helpful because everything was so new, including the idea of driving myself around. That level of support gave me such a great start to motoring and peace of mind, and I will be forever grateful to that company.
Once the internal office paperwork was done, we started the process of purchasing the car and the excitement began to sink in. Since the company was purchasing the car for me, the logbook was initially registered under their name. Therefore, there was quite some coordination that might have been more an ordinary sale, and my employer guide me through the steps.
Read also – What I Learned Buying My First And Second Cars
I didn’t even have to choose an insurance cover. I was so green in car ownership and insurance matters that I would not have known where to begin. I was also guided through handover logistics, making the whole process smoother and more educational for me.
Right from the onset, I kept a dedicated file for the car, where I stored photocopies of every letter, the agreements, receipts and eventually the logbook transfer documentation. There was nothing like online registrations with NTSA like we have now. We sent hard copy letters to Times Tower and waited but for me since I was living in Mombasa, I didn’t want to carry on such a sensitive transaction via postal mail, and my brother was kind enough to go follow up physically in relevant Government offices here in Mombasa.
The habit of keeping all documents safe turned out to be a big win, since after the four years of repayment, ownership transfer was a breeze and so was reselling later. This also taught me the power of discipline and personal administration.
Looking back, if I hadn’t gone the employer route I would have considered bank financing. True, banks were a little intimidating back then, but we can’t go through life not trying out things because of fear. There was this perception that they were only for the wealthy and that loans were complicated and unforgiving but that’s not really the case.
Many banks offer very flexible auto financing products. Take for instance the Stanbic Bank Vehicle and Asset Finance facility that lets clients purchase assets without the requirement of additional collateral other than the asset. This is not only for personal vehicles, but also agricultural equipment, solar equipment and other business assets for growth. These facilities are open to different customers including salaried employees and come with quite a number of features to make the process smooth.
We are looking at 100% financing with no collateral and up to 72 months repayment period, financing for insurance premiums, automatic insurance expiry reminders and financing for both new and used cars.
Stanbic has simplified the application process, and I think this is great as it reduces the apprehension that comes with big purchases. Read more about the features and requitements here.
Back to my story, for four years the company deducted the installments directly from my salary. Some months were tight especially in the beginning as I was adjusting to the new financial shortfalls, but I was still in fairly good standing. I was not just paying for a car, but also learning discipline, structure and understanding the principle of cost versus value in real-time.
My learnings? Buying an asset is not about affording monthly installments but also understanding ownership costs like insurance, fuel and service.
Keeping good records always pays off, as well as being aware of the long term value of the car in terms of career and lifestyle.
If you’re considering financing a car, whether through your employer, a bank, or another method, don’t just look at the price tag. Think about structure. Think about support. Think long-term. That’s where the real value lies.
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