Soaring Living Costs and Exchange Rates Drive Boom in Nigerian-Used Car Market
Economic pressures—including rising living costs, high exchange rates, and increased import tariffs—are making foreign-used cars unaffordable for many Nigerians. As a result, the Nigerian-used car market is experiencing significant growth, with more buyers opting for locally pre-owned vehicles due to their relative affordability.
According to findings by Saturday PUNCH, there has been a sharp rise in vehicle listings by private owners, particularly on online marketplaces, social media platforms, and roadside car lots. This surge comes as car dealers lament the increasing prices and declining demand for imported vehicles.
Although foreign-used cars, commonly called Tokunbo, remain popular, their prices have doubled or even tripled over the past year. This steep increase is largely due to the depreciating naira and heavier import charges. The volume of imported vehicles has also declined considerably following the introduction of a new 4% Free On Board (FOB) levy, which replaced the former 1% Comprehensive Import Supervision Scheme (CISS) charge.
The Nigerian Customs Service (NCS) explained that the new levy, enshrined in the Customs Act 2023, serves as a major funding source for customs operations, including the deployment of the B’Odogwu cargo clearance system. Comptroller-General Adewale Adeniyi said the transition aims to modernize the service and reduce clearance bottlenecks. “The one per cent CISS has served the country for decades,” Adeniyi noted during a recent stakeholder forum in Lagos. “But as we embrace digitisation and indigenous technology like the B’Odogwu platform, Customs must find sustainable ways to fund these transformations.”
Speaking to Saturday PUNCH, Nurudeen Amodu, a dealer in both Nigerian and foreign used vehicles, highlighted how the rising automobile prices have reversed previous business practices. “Previously, Nigerian dealers would travel to Cotonou and other neighboring countries to purchase cars because our currency was strong. Now, buyers from those countries come to us because their money is more valuable than the naira,” Amodu said.
He cited dramatic price increases in popular models over recent years:
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Toyota models (2003–2006) that used to sell for about N1.5 million now cost between N8 million and N10 million
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Honda CR-V (2010) prices rose from N5 million to N13 million
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Lexus RX330 went from N5 million to N15 million
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Toyota Venza increased from N6 million to nearly N20 million
Amodu further explained that the sharp naira depreciation has driven foreign-used car prices to levels equal to or exceeding those of locally used vehicles. “Some companies have had to liquidate because it’s no longer viable. A business with N100 million capital that used to stock ten cars at N5 million each can now only afford a few vehicles at N15 million each,” he added. “We have introduced car swaps where customers trade in their old cars plus some cash for newer ones to help mitigate this.”
Car dealers in Sokoto also report growing demand from buyers in neighboring Niger Republic, attracted by better pricing due to the relative strength of the Nigerien currency. Haruna Abubakar, a dealer along Maiduguri Road in Sokoto, said, “More customers now come from Niger Republic than from Nigeria. They mostly buy popular models like Toyota Corolla, Camry, and Sienna. This used to be reversed, but with the current exchange rate, Nigerien buyers dominate our market, which is good for business.”
Another dealer, Mallam Jamiu Bello, noted that many Nigerien nationals not only buy Nigerian-used cars but also request Nigerian number plates. “Their laws allow them to use Nigerian plates after obtaining a specific document, and they drive the cars back home under these plates,” he said. Bello added that vehicles with Nigerian registration numbers are common in Niger Republic, especially those coming from Sokoto, and this trend is boosting the local automobile market despite ongoing economic challenges affecting Nigerian buyers.
In Lagos, a car seller identified as Sam observed that the Customs duty increase and high exchange rates have shifted consumer preference toward Nigerian-used cars. “It is now harder for many Nigerians to afford cars. Some are selling their vehicles just to survive. For example, I bought a fairly used 2005 Toyota Corolla for N4 million, while another was listed for N5.2 million due to the owner’s financial issues,” Sam explained. He also mentioned that buyers from Benin Republic and Cameroon are attracted to Nigerian-used cars because of stronger currencies. “A 2013 Ford Escape sells for between 2.8 million and 3 million CFA in Cotonou, but in Nigeria, it goes for N11 million to N13 million,” he added.
Amid these challenges, the Association of Motor Dealers of Nigeria has called on federal and state governments to boost support for locally assembled cars as a sustainable alternative. Ajibola Adedoyin, the national president of the association, told Saturday PUNCH that strengthening local automobile production would reduce dependence on costly imports, create jobs, and stabilize vehicle prices.
Adedoyin revealed plans to engage Nigerian car manufacturers to produce affordable vehicles for the average Nigerian. “Given current car prices, low-income earners making around N100,000 monthly would find it difficult to repay loans even if they qualify because they have other financial responsibilities,” he stated.
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