Economic Strain Fuels Boom in Nigerian-Used Car Market as More Owners Sell Off Vehicles

With rising inflation, soaring exchange rates, and surging import duties, Nigeria’s foreign-used car market is rapidly shrinking—giving way to a booming trade in locally-used vehicles. More Nigerians are selling off their private cars to cope with harsh economic realities, while buyers are increasingly opting for more affordable Nigerian-used alternatives.

Foreign-Used Cars Now a Luxury

Previously popular foreign-used cars, known as Tokunbo, have become unaffordable for many, thanks to a weakened naira and a hike in import tariffs—most notably the replacement of the 1% Comprehensive Import Supervision Scheme (CISS) levy with a new 4% Free On Board (FOB) charge under the Customs Act 2023.

The Nigeria Customs Service (NCS) defended the move as a step toward modernisation and digitisation. NCS Comptroller-General Adewale Adeniyi explained, “The one per cent CISS has served the country for decades. But as we embrace indigenous technology like the B’Odogwu platform, the Customs must find sustainable ways to fund these transformations.”

But car dealers say the effect has been devastating.

“Cotonou Now Comes to Us” — Dealers Speak

Nurudeen Amodu, a Lagos-based dealer, told Saturday PUNCH that the price surge has flipped the script on the long-standing practice of Nigerian dealers sourcing cars from neighbouring countries.

“Back then, we used to travel to Cotonou and other countries to buy cars because our currency had value. Now, they come to us. Some customers from Cotonou recently came to buy Nigerian-used cars. They said their currency is stronger than the naira,” Amodu said.

He highlighted drastic price hikes:

• Foreign-used Toyota 2003–2006 models that once cost N1.5m now go for N8m–N10m

• Honda CR-V 2010 has risen from N5m to N13m

• Lexus RX330 from N5m to N15m

• Toyota Venza from N6m to nearly N20m

He added, “Imagine running a car business with N100m capital. When cars were N5m, you could stock 10 units. Now each one costs over N15m. Many dealers are liquidating.”

Swap Deals, Foreign Buyers, and Roadside Sales

To stay afloat, some dealers now offer car swap services—allowing customers to trade in their old vehicles and add cash to upgrade. Others rely on foreign buyers.

In Sokoto, multiple dealers confirmed an influx of buyers from Niger Republic.

Haruna Abubakar, a dealer along Maiduguri Road, said, “I now have more customers from Niger Republic than within Nigeria. They mostly buy Toyota Corolla, Camry, and Sienna. The exchange rate makes it cheaper for them.”

Another dealer, Mallam Jamiu Bello, added that some Nigerien buyers even request Nigerian number plates for ease of use back home. “You will find many cars in Niger Republic bearing Nigerian plates, especially from Sokoto,” he said.

A Lagos-based seller, identified only as Sam, noted that buyers from Benin Republic and Cameroon are also cashing in on Nigeria’s economic downturn.

“I bought a fairly used 2005 Toyota Corolla for N4m. I saw another for N5.2m because the owner needed money urgently. In Cotonou, a 2013 Ford Escape costs around 2.8m–3m CFA, while here it’s selling for N11m–N13m.”

Private Owners Selling to Survive

Beyond dealers, private owners are selling off personal vehicles to survive the rising cost of living.

Olumide Adegbola, a former car owner, said he sold his Toyota Corolla for N4m to afford basic necessities. “Feeding my family became a struggle. I had no choice,” he said.

Another man, Yunusa, admitted selling his car under false pretenses. “I told a client I was travelling, just so I could sell my car. Hunger will make you do anything to survive,” he confessed. “Now, I don’t have a car, and I don’t know when I’ll be able to afford one again.”

Calls to Support Local Assembly

The Association of Motor Dealers of Nigeria (AMDN) is now urging both federal and state governments to back locally-assembled vehicles as a long-term solution.

AMDN National President, Ajibola Adedoyin, said:
“With car prices at current levels, someone earning N100,000 a month can’t afford a vehicle, even with a loan. That’s why we’re engaging Nigerian car manufacturers to produce affordable, roadworthy cars for average Nigerians.”

He also warned that the new levy system, along with existing import duties, would drive imported cars even further out of reach. “The four per cent FOB levy replaced only a one per cent charge, meaning a net increase of three per cent. The other seven per cent surcharge, meant for the Ports Authority and others, remains untouched.”

Expired Cars, Unsafe Roads

Adedoyin raised another concern: rising car prices are forcing people to hold onto—and refurbish—expired vehicles, increasing the risk of road accidents.

“People can’t afford new cars, so they ‘manage’ old ones. This is dangerous. Cars are necessities, not luxuries,” he said. “Until purchasing power rises or vehicle costs come down, we’ll see more of this.”

Maritime Stakeholders Weigh In

Freight and customs agents say the new four per cent FOB levy adds to an already burdensome cost of doing business.

Pius Ujubonu, former interim president of the Association of Nigerian Licensed Customs Agents, said, “It’s turning vehicle ownership into a luxury. There were no exemptions—not even for commercial vehicles. In a few months, cars will be out of reach for nearly everyone.”

Nnadi Ugochukwu of the Elders Maritime Agents Association added, “Many businesses will fold. The added costs push prices up, and that inflation trickles down to the consumer.”

Stanley Ezenga of the National Association of Government Approved Freight Forwarders said it’s too early to measure the full impact of the new policy. “Let’s wait a few months. Importers will just pass on the extra cost to buyers. Prices will rise further.”

Bottom Line

With imported cars now beyond the reach of many and the economy in crisis, Nigeria’s used car market is undergoing a dramatic shift. More citizens are selling their vehicles to cope with hardship, while foreign buyers seize the opportunity to purchase at discounted rates.

For many Nigerians, car ownership—once a sign of upward mobility—is fast becoming an unaffordable dream.