Tokunbo auto dealers in Nigeria have complained that the downward value of used cars in Nigeria is due to the forex crisis and low customer purchasing power due to economic problems.
BusinessDay reports that auto dealers lament that the downward trend in the importation of used cars since the Nigerian Customs increased the cost of duty has affected them and the cars they sell. They state that import duties significantly affect the number of used cars imported into the country.
The challenge started back in April 2022 when the Nigerian Customs announced that it would update the importation of car edition from 2017 to 2021 in compliance with the ECOWAS Common External Tariff to the 2022 to 2026 version in which used cars coming into Nigeria are expected to pay a 20% tariff rate.
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Used car importers in Nigeria also noted that the increase in import duties has also affected shipping firms that ship used vehicles into Nigeria. Mentioning shipping firms like Grimaldi Group and Salmo, they noted that they’d witnessed about a 40% to 60% decrease in exportation and downsized the vessels used to bring cars into Nigeria.
According to used car dealers, these shipping companies that formerly used 2,300-vehicle capacity vessels to ship into the country have downsized to 1,000 or 1,500 capacity vessels.
It doesn’t help that the Nigerian Customs Service adjusted the age limit of vehicles entering the country from 2013 to 2014. Any vehicle lower than the 2014 year will be made to pay import duty payable on 2014 model vehicles.
The result is that while the value of Tokunbo cars decreases in the market, the prices still go up, making it impossible for the average Nigerian to afford these used cars.
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