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The opportunity cost of owning a car in Nairobi

  Description Cost per month Monthly total Cost per year Sub total Total Cumulative
Initial cost
1a Purchase a “new”  ex Japan car. 1,000,000
1b Install car tracking system, sound and rims 80,000
Running costs
2a Fuel of Ksh 500 per day to go to work and back 6 days a week, 4weeks a month 500*6*4 = 12,000 12,000* 12 = 144,000  
2b Parking fees at Ksh 300 per day 6 days a week, 4weeks a month 300*6*4 = 7200 7200 * 12 = 86,400  
2c Service 5,000 5000 * 12 = 60,000  
2d Replace 2 tyres per year at Ksh 10,000 per tyre 10,000 * 2 = 20,000  
2e Insurance at 7.5% of the value of the car 75,000  
2f Wear and tear 10% of the value of the car 100,000  
  Sub total         485,400  
  Total cost in year 1         1,565,400  
  Year 2         485,400 2,050,800
  Year 3         485,400 2,536,200
  Year 4         485,400 3,021,600
  Year 5         485,400 3,507,000
  Year 6         485,400 3,992,400
  Year 7         485,400 4,477,800


  1. The car is not a fuel guzzler.
  2. You live 15km from your place of work.
  3. You are a safe driver thus you are not having to repair other peoples cars.
  4. You strictly obey all traffic rules even the 50KM / hr rule thus you are not fined.
  5. For the subsequent years, let’s assume the running costs remain the same.
  6. We have worked with 6 days a week, assuming that you don’t use the car on Sundays and or that there is normally some fuel left at the end of the week to take you wherever you want to go on Sunday.
  7. We have assumed that you did not borrow from a bank to buy the car.
  8. We have assumed that you are not given a car maintenance or miliage allowance.
  9. Other costs that might be missing have been included in the 10% depreciation.



  • At the end of the 7 years, the value of your car has really depreciated to maybe 30 – 40 % of its initial value.
  • The car needs a change of many parts or maybe even an over whole.
  • You are still living in a rented house.
  • You are thinking of buying a bigger car to fit your new position at work.


If this math holds true, in 7 years, you have just forfeited owning a 2 bedroom master en suite apartment off Mombasa road or in Ruaka which average Kshs 4.5 Million or buying a plot of land and building a house to shelter “your people”.


Kariùki Wawerù

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