Cheaper Cars for Nigerians as Dollar Crashes to N1000 to Naira

While owning even a used car has seemed like an unrealizable dream for many Nigerians, this is about to change following the recent developments by the Nigerian government. The government has new plans, particularly for low-income earners, as it activates the implementation of the planned 42 per cent reduction in import tariff.

According to reports, with this planned reduction in the levy, car importers would pay 35 per cent duty and 5 per cent levy (instead of 35%), amounting to a 40 per cent tariff on imported vehicles. The 30 per cent deducted from the levy represents 42 per cent of the total 70 per cent tariff. 

Reports note that this reduction in tariff is expected to also lead to a drop in the current market prices of cars. Why? As car dealers pay less on import duties, individual buyers will pay less for their favourite vehicles.

Business Day notes that when the National Automotive Policy 2013 came into effect, the tariff on imported vehicles became 35 per cent duty and 35 per cent levy, amounting to 70 per cent tariff. With the exchange rate continually increasing to the detriment of the naira, the cost of imported cars, even though used cars, continued growing until some people had to shift to buying locally used cars. This is apart from the role recession, inflation, and the shrinking purchasing power of many Nigerians played in straining the ability of Nigerians to own cars.

The result of the National Automotive Policy affected the average Nigerian who had to purchase “accident vehicles” that are cheaper to bring in and have less import duty. With the reduction in tariff, it is not sure that the importation of accident vehicles will reduce, but car importation generally will increase while acquisition becomes cheaper.

Speaking on this new development, Tony Anakebe, managing director of Gold-Link Investment Limited, told Business Day: “This would be good for low-income Nigerians who may be able to afford imported ‘Tokunbo’ cars rather than depend on Nigerian used cars. It will help grow the nation’s automobile industry and may increase the importation of new cars into the country.”

Also speaking to the publication, a man identified as Chukwu Emmanuel, a dealer at Berger Car Mart in Lagos, notes that it is cheaper to import accident cars, and the duty payable on them is also small because it comes with a rebate. He said that car dealers in Nigeria bring in accident vehicles and repair them before putting up the cars for sale.

Seyi Odutun, another Lagos-based car dealer, told the publication that importing accident cars became the delight of importers to bridge the gap created by high prices. He added that Nigerians are not buying used cars because they prefer them to new vehicles but because they are more affordable. 

He said: “The citizens need vehicles for movement of persons, goods and services. Bringing in accident cars is one of the ways importers try to recoup from the money invested due to the high exchange rate and high tariff because it is cheaper and profitable to bring in such low-quality cars, repair and sell.”

Research conducted by Business Day also highlighted that about 70 per cent of cars presently imported into Nigerian markets are accident cars, as seven out of 10 vehicles cleared at the PTML Command of the Nigeria Customs Service (NCS) have been involved in an accident.

However, following the tariff reduction plan by FG, the publication noted that while it has legal backing contained in the Finance Act 2020, its implementation is yet to take off as Nigeria Customs says it is yet to receive authorization from the Federal Ministry of Finance, its supervisory ministry, giving the Service the ‘go ahead’ to begin implementation.

Cheaper Cars for Nigerians

Following the plan for the car importation tariff reduction, here are some of the cheapest cars to purchase in Nigeria today:

1. Toyota Camry 1996-2009

The Toyota Camry brand is one of the most popular cars on the streets of Nigeria. It has even been given many nicknames because of its popularity, easy maintenance, and fuel economy. It is also a comfortable car with in-built safety features, brakes, tires, and engines. In Nigeria, depending on the model, you can get a used, durable, and efficient Toyota Corolla for one million naira or below.

The 1996 to 2009 Toyota Camry prices in Nigeria range from N900,000 to N6 Million. You could afford to get your hands on any of these models depending on your budget. While most people might consider the 1996 model outdated, the 2004 to 2009 Toyota Corolla models are still presentable vehicles driven in Nigeria today, and the higher trim levels of some of these models come with advanced features you could still find in the latest model cars.

2. Volkswagen Golf 3 & 4

The average price of a suitable used Volkswagen Golf 3 & 4 in Nigeria ranges from N650,000 upwards. It all depends on the model year you’re interested in. Volkswagen Golf is one of the cheapest cars to make its way into Nigeria. The brand is most famous for its durability, affordability, and capability to go through long journeys. 

The Volkswagen Golf series used to be one of the most popular cars in Nigeria, used by members of the upper class in the 1990s, and over the years, it is still a tested and trusted brand. 

3. Mercedes-Benz C300

With about N2 million, you can easily own a Mercedes vehicle. The Mercedes C300 is one of the most affordable Mercedes cars currently in the country. While the latest model versions of this vehicle are pretty expensive, going after models like the 2004 to 2010 models is an excellent choice if you’re worried about your budget.

The Mercedes-Benz brand is a popular one in Nigeria, and the latest models of the brand are luxury cars. The C200 is a sleek-looking car that can be gotten at an affordable price. Mercedes-Benz, often related to luxury, leads people to believe that the rich can only afford it. Still, a luxury-looking Mercedes Benz C200 can be sold for less than N2 million in Nigeria. It all depends on the model and seller.

4. 2001 Toyota Sienna

In the list of cheapest cars to buy in Nigeria today, there’s still something for even families looking for affordable vehicles: the 2001 Toyota Sienna, which has a price range between N1 million to N1.8 million.

The Toyota Sienna is the perfect minivan that provides passengers comfort and security. It is an excellent choice for a large family as a family car. Although it does not have a sleek look, it will transport its owners to and fro for a very long time.

5. 2002 Nissan Xterra 

Looking for an affordable SUV? Then the 2002 Nissan Xterra should be your next bet. While the Nissan Xterra is an old model vehicle, it is still a presentable vehicle in Nigeria. The SUV is known for going on long-distance journeys and riding on Nigerian roads without fear.

The current market price of the 2002 Nissan Xterra ranges from N2 million upwards. It might be rare to find a Tokunbo-used version of it. However, some Nigerian-used versions of the Nissan Xterra, still in good shape, will serve owners well.

Conclusion

Once the tariff reduction kicks off, prices of used cars in Nigeria will continue to reduce, and many more vehicles will be added to the list of affordable cars in the country. While there are other affordable vehicles in the country, these are vehicles you can still get in Nigeria today within the N1 – N2.5 million mark.