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

The escalating cost of living, elevated exchange rates, and increasing import tariffs are rendering foreign-used vehicles increasingly unaffordable for many Nigerians.

Consequently, there is a noticeable shift towards Nigerian-used cars, which have become the preferred option.

This trend, as reported by Saturday PUNCH, is catalyzing a surge in the Nigerian-used car market, as a greater number of buyers are opting for locally pre-owned vehicles due to their affordability.

Research conducted by Saturday PUNCH indicates a significant rise in vehicle listings by private owners, particularly on online marketplaces, social media platforms, and roadside car lots.

Meanwhile, car dealers have expressed concerns regarding the escalating costs and decreasing demand for imported vehicles.

Although foreign-used vehicles, commonly referred to as Tokunbo, continue to enjoy popularity, their prices have reportedly doubled or even tripled within the past year due to the depreciating naira and substantial import charges.

This situation arises amidst a marked decline in the volume of imported vehicles, a consequence of the introduction of a new four percent Free On Board (FOB) levy, which has replaced the previous one percent Comprehensive Import Supervision Scheme charge.

The Nigerian Customs Service (NCS) has previously announced that this new levy is mandated by the Customs Act 2023 and is intended to serve as a principal funding source for its operations, including the implementation of the B’Odogwu cargo clearance system.

Comptroller-General of the NCS, Adewale Adeniyi, stated that the transition from the Comprehensive Import Supervision Scheme to the Free On Board levy is designed to modernize the service and mitigate 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.”

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.”