Transportation for young working professionals has become a necessity rather than a luxury. The means of transport has become fundamentally important to people who have to travel from one place to another. However, the capital requirement for vehicle purchase weighs very heavily on the average middle class professional. Not many people have the funds to buy a vehicle outright, especially with an upsurge in the price of vehicles coupled with the many financial burdens of modern day living.
A quick search around garages in Accra revealed that a decent fairly used vehicle for a middle working class person costs between GHS25,000 and GHS 35,000. The price goes through the roof for those who want to buy new cars. According to one dealer, depending on the model, a comfortable brand new saloon car could as much as GHS 120,000. This makes it very difficult, if not impossible, for the middle working class people who want to own a vehicle of their own to ease their movements.
Data from the Driver and Vehicle Licensing Authority (DVLA) show that between 2012 and 2016, a total of 694,656 vehicles were registered in the country. Out of this number, over 75 per cent (520,992) are used cars, making the purchase of brand new cars the preserve of a few Ghanaians.
The next reasonable option open to them is to apply for vehicle finance from banks or financial institutions. More so when the middle working class Ghanaian could spend an average of GHS800 on transportation to and from work every month depending on the distance between one’s place of abode and his/her workplace. This sums up to some GHS9,600 every year. An amount that can easily get one a vehicle of choice when saved over two or three years. A vehicle financing facility becomes a very prudent option in this regard.
Successfully navigating through the process of securing a vehicle loan can be a daunting task and hence requires a partner that is committed to understanding clients’ unique circumstances and finding a solution that works for them. It is for these reasons that Stanbic Bank Ghana has come up with a vehicle financing structure that makes the process for vehicle loan acquisition easy and seamless for its customers.
According to Wendy Nelly Sarpong, Vehicle and Asset Financing Manager of Stanbic Bank Ghana, the bank’s vehicle financing structure goes beyond just giving out loans, to provide a holistic vehicle financing package that benefits its customers.
“Our product is structured in a way that engages the customer right from the point of choosing the vehicle through to financing it, till the time the vehicle is delivered to you,” she said.
The Vehicle and Asset Finance unit of Stanbic Bank, according to Ms. Sarpong, includes vehicle dealership where the bank serves as the third party to the transaction. This makes it easier for customers to purchase vehicles from trusted dealers while getting the vehicles at a discounted price due to the relationship between the bank and the dealers. This also serves as a relief for customers who want certain cars but lack the required amounts of money to buy the cars.
Another benefit Stanbic Bank’s vehicle financing structure provides is an insurance cover for the vehicles purchased.
“If you are buying through us, the bank offers insurance,” Ms Sarpong said. “If you buy a car, you are required by law to insure the vehicle- an offering which is embedded in our package.”
What this means, according to Ms Sarpong is that Stanbic is able to amortize the insurance quote to the cost of the vehicle and then the customer pays monthly. This is a more convenient option than having to buy a car and pay insurance – whether comprehensive or third party – at a go.
Ms. Sarpong advised customers to always consider their income before applying for a vehicle financing facility from a bank. She said beyond the vehicle purchase, there is also the financial burden of vehicle servicing and maintenance, which are very expensive for certain categories of cars.
“Customers who want a vehicle mostly want it for transportation to move from one place to another but do not know the details of it,” she said. “If you depend on vehicle dealership, they will obviously not badmouth their product. And fortunately, we have the advantage because we work with the dealership and we can easily advise what good vehicle fits a customer’s budget.”
Stanbic Bank Ghana’s vehicle financing unit has been in operation since 2006 and is dedicated entirely to the financing of vehicles and other assets.