Nigerians are buying more locally used cars because imported cars have become too expensive. The value of the naira has fallen, making it costly to import cars. For example, in 2015, a 2005 Toyota Corolla imported car cost about N1.9 million, but now it costs N6.5 million, showing a 242% increase.
Locally used cars in Nigeria are also more expensive now, but not as much as imported ones. For example, a Nigerian-used 2005 Toyota Corolla that cost N1.2 million in 2015 now sells for between N3 and N3.5 million, marking a 191% increase.
Adedayo Oyewole, a car dealer in Ogun State, shifted to selling only Nigerian-used cars because of the high cost of imported cars. He mentioned that foreign used cars are expensive, and dealers are not buying them anymore because they stay longer in the
in the showroom.
“I used to have people in America who would ship cars to Nigeria for me to sell, but they no longer bring them due to the high cost of clearing at the ports and low consumer demand,” Oyewole said. He explained that clearing cars from the port has become very expensive due to the high and unstable exchange rates used for calculating customs duties and the implementation of the Vehicle Identification Number (VIN) valuation policy, both of which increase the tariff on imported cars.
The decrease in demand for foreign used cars is causing cars to remain unsold for longer periods, which is also discouraging investors as it ties up their money for longer. Ojurongbe Damilola, head of Technical Services at Cars45, confirmed that Nigerian used cars have seen an increase in demand and have become the biggest beneficiaries of the foreign exchange crisis. The shift in demand towards Nigerian used cars reflects the impact of the FX crisis on consumer preferences in the Nigerian automotive market,” he said. Government policies, such as changes in import tariffs, taxation, and regulations like the proposed automation of the clearing process at ports in 2023, directly affect vehicle prices. He added that before the FX crisis worsened in 2023, a foreign-used Toyota Corolla was sold for N4.5 million, while a Nigerian-used option was sold for N2.5 million. Before the COVID-19 pandemic, Nigerian consumers preferred imported foreign used cars, known as ‘tokunbo,’ due to the high cost of brand-new vehicles. This preference contributed significantly to the growth of the used car market in Nigeria.
According to Mordor Intelligence’s 2023 Nigeria’s Used Car Market Analysis, Nigeria’s used car market size is estimated at $1.14 billion in 2024 and is expected to reach $1.74 billion by 2029, growing at a compound annual growth rate (CAGR) of 8.90% during the forecast period.
