!. Am a business man from Eastern Kenya;These matatus here are named Shuttle – and each makes a to and fro and makes around 4800/=per day. I prefer these shuttles more than the 14 seater, coz the 14 seater is full of stress by the police and conductors. These shuttles are well co-ordinated and you car is run on a minimum cost (e.g services, No corruption with the police, so your car loses no money in the route) and again you can run it with a fixed amount of delivery).
==That’s a lot of money, I can’t promise you that amount here in Nairobi especially town services. Here we operate with between 3.500 and 4k net. We make about 12.000 minus fuel and other expenses like salaries. You have every reason to think about investing in the shuttles; I agree with you on cutting cost with proper management, what Is basically what we as Rongai welfare are working on laying the foundations. Corruption by traffic officers is the biggest obstacle to matatu investment.
3. The shuttles here don’t have conductors coz there are stationed.
==That is another plus, passengers pay a fixed amount and mostly at stations; In our case, we need the conductor, town service jobs can’t be possible without their services.
Your quiz’s are:
1. I am caught up between buying a second hand (no so old) and buying a new one through a loan. (according to some matatus owners here; is that u cant pay the loan above that is almost 2.2 million, coz of the challenges involved nowadays.
==If you are talking about a Toyota hiace 14 seater / 11 seater shuttle, the idea of buying a new one is out of question, why; because the government stopped the licensing of 14 seaters. You can not register a new vehicle nowadays unless you buy a fleet of several vehicles as a sacco. If you can get a Toyota in good condition say from KBC—to –KBL—you can buy the vehicle from 750k to 900k.
==Buying a new matatu will mean a 29—33 seater minibus. The total cost to own a minibus is 4.5m. Kenya Commercial Bank has a facility with General Motors- you get a form from the vehicle dealer and the bank finances the transaction on your behalf. i.e. they pay General motors and you pay back the loan according to the banks terms and conditions.
2. According to the politics in Kenya today , Do i wait the outcome or i should go ahead.
==Elections are the only obstacle that is hindering investment , but I have a lot of confidence with Kenyans that nothing out of normal will arise. It is advisable to do the research now, identify the vehicle of you choice, talk to your bank and see what they have to offer and by the mid-march we will have a clear direction as to where we are heading.
3. If i have to buy a second hand (what do and donts should i look for)
==The first thing you should not do is buy a vehicle that has been involved in a fatal accident; It’s not a myth but this vehicle don’t end up well. If possible buy a vehicle that was a shuttle not a uptown matatu. Vehicle are like young girls, the more they are exposed the more they can’t make a good wife. Shuttles spend more hours parked while waiting for passengers and this makes them the best choice when you want a car you will use for some years and still be able to get a good price when you want to change investment.
4. I.ve never done my business with a loan from any bank ) so having a loan is a challenge ,but i can face if well guided. i believe every business should run itself , so i don’t want to use my money from other sides to pay a matatu, it should cater for itself.
==To afford a matatu, you must have really worked hard to get where you are. What a loan does is get you hooked to your investment. Once you have put a certain percentage of your money in to buying something and then someone adds his money to your idea, it is scaring to imagine that you stand to loose even what you have contributed to the financer if you fail to honor the agreement. To somebody like you who know how to generate and grow monies it will largely depended on your cabability to manage the income. According to what you had mentioned above, this shuttles make 4—-4800 ksh.
5. Are new matatus registered these days.(TLB)
==Yes and no; any matatu carrying more than 25 passengers is being registered- but no new 14 seaters.
6. At how much a 5L,3L,and 7L matatu are costing these days and if you take it through loan at how much extra cost would it go for.
==A used Toyota 5L is in the market from 700k to 1.2m depending on trhe condition of the vehicle and year of registration. You can get a good 3L for about 500k and 600 most; many of this are KA—something. I don’t know how much 7L is going for but I wouldn’t recommend you to buy one as the spares have not flooded the market. It is still an expensive car to maintain.