Hardship: Nigerian-used car market booms as more owners sell off private vehicles

 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, Saturday PUNCH has learned, is fuelling a boom in the Nigerian-used cars market as more buyers turn to locally pre-owned vehicles for affordability.

Soaring

Findings by Saturday PUNCH 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 told Saturday PUNCH that they are witnessing an influx of buyers from neighbouring 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.

Speaking with Saturday PUNCH, 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.

Speaking with Saturday PUNCH, 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.