With the cost of living soaring, the exchange rate worsening, and import duties climbing, foreign-used vehicles have become increasingly unaffordable for many Nigerians. This has triggered a significant shift in the automobile market, as locally used cars emerge as the more viable option for buyers.

Investigations show a notable rise in listings of Nigerian-used vehicles, especially on digital marketplaces, social media platforms, and roadside lots. At the same time, dealers report a sharp drop in demand for imported cars due to rising costs.

Dealers attribute the surge in prices of foreign-used vehicles—popularly known as Tokunbo—to the naira’s devaluation and increased import tariffs. In many cases, prices have doubled or tripled compared to the previous year.

This shift follows a significant policy change that introduced a four per cent Free On Board (FOB) levy, replacing the earlier one per cent Comprehensive Import Supervision Scheme (CISS) charge. The Nigerian Customs Service (NCS) explained that this adjustment aligns with the new Customs Act 2023, aimed at modernising clearance operations and funding the deployment of a new cargo clearance system known as B’Odogwu.

The Comptroller-General of Customs, Adewale Adeniyi, stated that the transition from CISS to FOB is necessary to sustain reforms and advance technological integration.

Local Dealers Experience Unprecedented Activity

Nurudeen Amodu, a dealer in both local and foreign-used vehicles, noted the dramatic reversal of car trade dynamics between Nigeria and neighbouring countries.

“Years ago, we traveled to Cotonou to buy vehicles because our currency had more value. Now, buyers from Cotonou come here because the naira has weakened significantly,” Amodu said.

He pointed out price hikes in popular car models: Toyota models (2003–2006) now cost between N8m and N10m, up from N1.5m; the 2010 Honda CR-V has risen from N5m to N13m; the Lexus RX330 now sells for N15m; and the Toyota Venza has reached nearly N20m.

Due to the high prices of Tokunbo cars, some businesses have shut down. “Imagine having N100m to run a car business—before, you could stock 10 cars at N5m each. Now, you can only buy six or fewer due to the increase,” he explained.

To adapt, dealers now offer car swap deals where customers trade in old vehicles and pay the difference for an upgrade.

Dealers in Sokoto also report a steady influx of buyers from Niger Republic. Haruna Abubakar, based along Maiduguri Road, noted that most of his recent customers come from Niger, often seeking Toyota Corolla, Camry, and Sienna models.

“They come here because of the stronger value of their currency. It used to be Nigerians buying from them, but now the roles have reversed,” he said.

Another dealer, Mallam Jamiu Bello, said that Nigerien buyers frequently request Nigerian license plates, which they legally use back home under specific documentation procedures. He added that it’s common to see Nigerian-registered cars in Niger, especially those originating from Sokoto.

Similarly, a car dealer in Lagos, identified only as Sam, confirmed that the current economic realities are pushing more buyers toward Nigerian-used vehicles. “Some people are even selling their cars just to survive. I bought a 2005 Toyota Corolla for N4m recently. Another seller was offering theirs for N5.2m due to financial difficulties.”

Sam also noted that buyers from Benin Republic and Cameroon are increasingly turning to Nigeria for car purchases because their currencies are stronger. “A 2013 Ford Escape sells for about 2.8m to 3m CFA in Cotonou, but in Nigeria, it costs between N11m and N13m,” he added.

Call for Support for Locally Assembled Vehicles

With car importation becoming unsustainable for many, the Association of Motor Dealers of Nigeria is urging both federal and state governments to support local vehicle assembly initiatives.

The association’s national president, Ajibola Adedoyin, stressed that enhancing domestic car production would not only reduce reliance on expensive imports but also create jobs and help stabilize prices.

He said discussions are ongoing with Nigerian car manufacturers to encourage the production of affordable cars for low-income earners.

“For someone earning N100,000 monthly, it’s nearly impossible to afford a car, even with a loan,” he said. “Car manufacturers must start thinking of average Nigerians by making practical, cost-effective vehicles instead of luxury models priced beyond reach.”

The association is also engaging with the National Automotive Development Council to make locally assembled vehicles more efficient and durable.

Adedoyin criticised the government’s tax policy, noting that while the one per cent CISS was removed, the four per cent FOB levy introduced is effectively a three per cent increase. He further pointed out that other charges like the seven per cent surcharge by the Nigerian Ports Authority remain in place.

“We’re seeing a decline in vehicle imports and sales. This is why we are encouraging our members to shift focus to locally assembled cars rather than importing from the US or Canada,” he said.

He also warned that unaffordable prices are leading many Nigerians to continue driving unsafe, outdated vehicles, which contributes to road accidents.

“People can’t afford to replace their old cars. So they keep using them beyond their lifespan, which is dangerous,” Adedoyin said. “Cars are a necessity, and without stronger purchasing power, demand will continue to drop.”

Struggles of Private Car Owners

Several private vehicle owners shared their struggles. Olumide Adegbola explained that he had to sell his car to support his family amid growing financial pressure.

“I couldn’t even afford food. I sold my car—a Corolla I bought for N2m—for N4m just to meet family needs,” he said.

Another individual, Yunusa, revealed he sold his car without telling anyone. “I lied to a client that I was travelling, just so I could go sell my car. Hunger will make you do anything. I don’t know when I’ll be able to afford one again,” he said.

Customs Agents Weigh In

Industry stakeholders have warned that the new FOB levy could further hinder car imports. A former leader of a national customs agents association, Pius Ujubonu, remarked that acquiring vehicles is fast becoming a luxury.

“No exemptions were made for commercial or special-purpose vehicles. Without such considerations, vehicles will soon become unaffordable for most Nigerians,” he warned.

Another industry representative, Mr. Taiwo Fatobilola, raised concerns that the seven per cent surcharge previously promised for removal still appears in the system.

A member of the Elders Maritime Agents Association, Nnadi Ugochukwu, said the increased cost of clearing vehicles is forcing many importers to abandon their goods at ports. “This adds to inflation and could lead to widespread business closures,” he said.

However, Stanley Ezenga, from the National Association of Government Approved Freight Forwarders, argued it’s too early to gauge the full impact of the new levy. “Some imports already in the country haven’t been cleared yet. In time, we’ll see the real effect—but likely, it will drive inflation more than reduce imports,” he concluded.