Frequently Asked Questions

When you buy an asset, you pay the full price and own it outright. When you lease, you pay to use the asset for a set period without owning it. Leasing typically requires lower upfront costs and monthly payments, but you do not build equity in the asset. Buying costs more upfront but you own the asset at the end.

It is more difficult but not impossible. Some leasing companies in Kenya work with borrowers who have less-than-perfect credit, though you may face higher interest rates or need a larger down payment. Improving your credit score before applying, providing a guarantor, or offering additional collateral can improve your chances.

Depending on your lease type, you typically have three options: return the asset to the lessor, purchase the asset at the agreed residual value, or renew the lease for an additional term. Finance leases usually include a purchase option at a nominal price.

A lease payment consists of two components: the depreciation charge (the difference between the asset value and residual value, divided by the term) and the finance charge (interest on the average amount financed). Use our Lease Calculator tool to estimate your payments.

A logbook loan is a secured loan where you use your vehicle registration document (logbook) as collateral. You continue using the vehicle while repaying the loan. If you default, the lender can repossess the vehicle. These are popular in Kenya and East Africa for quick access to funds.

Flat rate charges interest on the original loan amount for the entire term. Reducing balance charges interest only on the outstanding balance, which decreases as you make payments. A 10% flat rate is roughly equivalent to an 18-20% reducing balance rate. Always compare the effective annual rate.

In most African countries, lease payments for business assets can be deducted as a business expense, reducing your taxable income. However, tax treatment varies between operating leases and finance leases, and between countries. Consult a tax professional for your specific situation.

A SACCO (Savings and Credit Cooperative Organization) is a member-owned financial institution that pools savings and provides loans to members at competitive rates. SACCOs are widely used across Africa, particularly in Kenya, as an accessible alternative to traditional banks.

Down payment requirements vary by lessor and your credit profile, but typically range from 10% to 30% of the vehicle value. Some leasing companies offer zero down payment options for customers with excellent credit.

Most lessors require comprehensive insurance coverage for the leased vehicle for the entire lease term. You must name the leasing company as an interested party on the policy. Some lessors offer bundled insurance as part of the lease package.