Soaring living costs, high exchange rates, and rising import tariffs are pushing foreign-used cars out of reach for many Nigerians, with Nigerian-used cars becoming the popular option.
This trend is fuelling a boom in the Nigerian-used cars market as more buyers turn to locally pre-owned vehicles for affordability.
Findings revealed a sharp increase in vehicle listings by private owners, particularly on online marketplaces, social media platforms, and roadside car lots.
This is even as car dealers lamented the rising costs and falling demand for imported vehicles.
According to them, while foreign-used vehicles, popularly known as Tokunbo, remain popular, their prices have doubled or even tripled in the past year due to the depreciating naira and heavy import charges.
The development comes amid a significant decline in the volume of imported vehicles, following the introduction new four per cent Free On Board levy, which replaced the former one per cent Comprehensive Import Supervision Scheme charge.
The Nigerian Customs Service had earlier announced that the new levy was enshrined in the Customs Act 2023 and would serve as a major funding source for its operations, including the deployment of the B’Odogwu cargo clearance system.
NCS’s Comptroller-General, Adewale Adeniyi, said the transition from the CISS to the FOB levy was aimed at modernising the service and reducing clearance bottlenecks.
“The one per cent CISS has served the country for decades,” Adeniyi said at a recent stakeholder forum in Lagos. “But as we embrace digitisation and indigenous technology like the B’Odogwu platform, the Customs must find sustainable ways to fund these transformations.”
Nigerian-used cars market booms
Speaking with Saturday PUNCH, a dealer in Nigerian and foreign used vehicles, Nurudeen Amodu, decried the rising cost of automobiles in the country, saying the situation had also reversed the old practice of Nigerian dealers travelling to Cotonou and other neighbouring countries to buy cars.
“Back then, what we usually did in the car business was to travel to Cotonou and other neighbouring countries to bring cars because our money was valuable, but currently they come to us to buy now because our money has lost value.
“Recently we hosted some customers from Cotonou that came to buy cars, and I asked them why, they said because their money has more value now than the naira and that they would make more buying Nigerian used cars,” Amodu said.
He gave examples of price jumps in recent years: foreign used Toyota (2003–2006) models that sold for about N1.5m now cost between N8m and N10m; the Honda CR-V (2010) rose from N5m to N13m; the Lexus RX330 from N5m to N15m; and the Toyota Venza from N6m to nearly N20m.
Amodu said the sharp depreciation of the naira had pushed the prices of foreign used cars, popularly called Tokunbo, to levels comparable to, or even higher than, locally used vehicles.
“Some companies have liquidated. Imagine running a business with N100m capital and stocking vehicles for N5m each before. You could have 10 cars in stock then, but now that each costs around N15m, you can see how the business is affected.”
“What we do presently to address the situation for our customers is car swap, where we collect your old car and you add a little money to get another,” he added.
Several car dealers in Sokoto also said that they are witnessing an influx of buyers from neighboring Niger Republic, to buy Nigerian-used cars due to better pricing.
They attributed the growing trend to the relative strength of the Nigerien currency against the Nigerian naira, making Nigerian-used vehicles more affordable for Nigerien buyers.
A car dealer operating along Maiduguri Road in Sokoto, Haruna Abubakar, said the number of customers from Niger Republic had surpassed local patronage in recent times.
“I now have more customers from Niger Republic than within Nigeria,” he said. “They often buy popular models like Toyota Corolla, Camry, and Sienna. It used to be the other way around, but with the current exchange rate, they are the ones buying from us, and it is good for our business,” Abubakar said.
Another dealer, Mallam Jamiu Bello, disclosed that he had been consistently selling Nigerian-used vehicles to Nigerien nationals over the past few years.
“Many of them not only buy vehicles here, but also request Nigerian number plates,” he disclosed. “From what I understand, their laws permit them to use Nigerian plates after securing a single document, and they drive the cars like that back home.”
Bello added that it is not uncommon to find several cars in Niger Republic bearing Nigerian registration numbers, especially from Sokoto.
According to him, the development is boosting the local automobile market in Sokoto, even as economic challenges continue to affect domestic buyers.
Also speaking, a Lagos-based car seller, who only identified himself as Sam, said people now patronise Nigerian-used cars more than foreign-used ones because of the Customs duty hike and high exchange rates.
“This current situation will make it difficult for many Nigerians to get cars. Even people now sell their cars so they can eat. I bought a fairly used 2005 Toyota Corolla for N4m. Also, in Lagos State, I saw another one whose owner said it was going for N5.2m. This is because the man has issues,” he noted.
Sam added, “Not only do people from Benin Republic buy Nigerian-used cars, but people also come from Cameroon. This is because their currency is stronger. Recently, I compared the prices of a 2013 Ford Escape in Cotonou, and it is between 2.8m to 3m CFA. In Nigeria, it is being sold for N11m to N13m.”
Dealers make case for locally assembled cars
Amid the rising cost of foreign-used vehicles and dwindling import volumes, the Association of Motor Dealers of Nigeria has urged the federal and state governments to increase their support for locally assembled cars as a sustainable alternative.
The national president of the association, Ajibola Adedoyin, argued that strengthening local automobile production would not only reduce dependence on costly imports but also create jobs and stabilise vehicle prices in the long term.
Adedoyin disclosed that the association was planning to engage car manufacturers in Nigeria to produce affordable cars for average Nigerians.
He stated, “With the current prices of cars, low-income earners earning around N100,000 monthly, even if they get a loan, they will find it very difficult to pay it back. There are many other financial obligations for such individuals.
“That is why we will be on better leverage when we purchase vehicles assembled in Nigeria. But, car manufacturers in the country are not thinking of average Nigerians. They should think about producing cars that are reasonably good and suitable for our usage. Right now, they are building supersonic cars with prices far beyond the reach of common Nigerians.
“We are trying to look inwards so as to patronise our own local assemblies in Nigeria. That is why we have been trying to partner with the National Automotive Development Council to see how we can bring that to reality. We have been talking about how to make our own cars here more efficient and durable.”
Adedoyin also expressed concern over the increase in car duties, adding that the new percentage will further push imported cars out of Nigerians’ reach.
Adedoyin said, “What was introduced is an increment, because four per cent was introduced and only one per cent was removed. They said they are cancelling the one per cent levy, and now they have added four per cent. So, there is an increment of three per cent at the end of the day.
“The other seven per cent that we thought they were going to remove is not even meant for the Customs. It was meant for the Nigerian Ports Authority and others. They did not remove it.
“It is a demand and supply thing. There is no patronage like before due to the prices. If you check the level of vehicle importation, it has also dropped. Right now, on our side, we are trying to see how we can really bring in locally assembled Nigerian cars to be sold by our members, rather than importing from the USA or Canada.”
The AMDN National President noted that it would be difficult for many Nigerians to afford any car at the moment, as prices had increased outrageously.
Lamenting the havoc the price hike had wreaked, Adedoyin said that expired cars were being refurbished, leading to accidents on the roads because they were no longer roadworthy.
He said, “That is why we are advocating that we look inwards. However, this issue has affected car sales. Invariably, this problem is causing harm on our roads because when people cannot replace their old vehicles, they tend to manage them. Managing such vehicles leads to a lot of accidents.
“Cars are necessities. If the purchasing power is not increased, there will definitely be a drop in purchasing. The exchange rate is another factor affecting the importation of cars. Although the exchange rate is not determined by Nigeria, if we check the rate now, the amount we exchange for dollars has greatly increased. Some years ago, it was not like this. Today, the duty for a car is based on the amount it is purchased for in dollars.”
More Nigerians sell cars
A private car owner, Olumide Adegbola, told our correspondent that he had to sell his vehicle due to the worsening economic situation in the country.
He explained that feeding his family had become a daily struggle, making it nearly impossible to afford fuel for transportation.
“The economy has really been tough lately. I can’t even afford basic necessities,” he said. “To stay afloat, I had to sell my car to meet my family’s needs. It was a Corolla I bought a few years ago for N2,000,000, but I had to sell it for N4,000,000.”
Another car owner, identified simply as Yunusa, also shared that he sold his car as a result of financial hardship.
Recounting his experience, he said, “I lied to my client that I was travelling just so I could sell my car. I wasn’t travelling, hunger will make you do anything just to survive.
“Now, I don’t have a car, and honestly, I don’t know when I’ll be able to afford one again. Things are really hard.”
“It’s the profit that made me sell it so that I can help my family and be stable financially.”
Agents speak
Licensed Customs agents operating in the nation’s maritime sector opined that introducing the four per cent FOB levy would negatively affect vehicles and other imports.
A former Interim National President of the Association of Nigerian Licensed Customs Agents, Pius Ujubonu, told Saturday PUNCH on Friday that the policy would make the acquisition of vehicles purely luxurious.
He added that in a few months to come, vehicles would be out of reach for nearly everybody in the country.
“It is almost making the acquisition of a vehicle purely a luxurious thing. It didn’t take into consideration the necessity of transportation, because there was no exemption in the policy introduction. If it is a situation where, for example, commercial, special-purpose vehicles, among others, are exempted, it would have been a different thing. But the moment you make it a policy without any exemption, it affects several ways. In the next one or two or three, four months, vehicles will almost be out of reach for nearly everybody,” Ujubonu said.
The National Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria, Mr. Taiwo Fatobilola, said, “The very moment there is an increase, it affects everything. But, the only area where we are disturbed is the seven per cent surcharge that has not been removed. Because the assurance they gave was that they were going to remove the one per cent CISS and the seven per cent surcharge. FOB is supposed to cover both that one per cent and seven per cent, but the seven per cent is still appearing on the system, so that is the only area where I feel.”
A member of the Elders Maritime Agents Association, Nnadi Ugochukwu, described the four per cent FOB as an addition to the cost of doing business.
“So, that is an addition. Many people are abandoning their goods, especially their vehicles, in the ports, because of the cost of clearing. And now they want to add more money to the cost. And when you push that to the people, it goes to the economy to cause inflation; it’s as simple as that.
“Many businesses will have to fold. But the point is that they will add the prices they sell in the market. So, of course, it will affect imports. Some people may no longer be able to travel. They just stay around and manage what they have here,” Ugochukwu said.
A member of the National Association of Government Approved Freight Forwarders, Stanley Ezenga, however, said it was too early to attribute the introduction of the four per cent FOB levy to the drop in imported vehicles.
“The thing just started, so it would be too early to judge the effect. But, no matter what, importation can never stop, and for now, it hasn’t dropped. So, we should give them like three months to see because already some products have been imported into the country that are yet to be cleared.
“To me, it won’t lead to any decline in imports; rather, it will lead to inflation because importers will add what they have spent on the goods, and it will trickle down to the final consumers,” he said.
FOLLOW US ON:
FACEBOOK
TWITTER
PINTEREST
TIKTOK
YOUTUBE
LINKEDIN
TUMBLR
INSTAGRAM
Lifestyle2 days ago
Business2 days ago
News2 days ago
Politics2 days ago
Crime2 days ago
Lifestyle2 days ago
Politics2 days ago
Crime2 days ago