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Rising importation costs: Are locally-used cars really the solution?

Rising importation costs: Are locally-used cars really the solution?

In less than a week, we would be in the month of December and whilst being thankful that we made it to the end of the year, one can’t help but notice that the joy and euphoria of the season, a.k.a Christmas spirit, seems to be on the downward spiral with each passing year.

At a time when many Nigerians usually decide to buy either their first “Tokunbo” cars or upgrade to newer models, 2023 would most likely see the least amount of vehicles being purchased, easily the worst of the last ten years. Grimaldi, one of the two major Roll on – Roll off carriers plying the US to West Africa route and operators of Nigeria’s largest vehicle importation port terminal has seen a sharp decline of between 60 percent – 70 percent in the volume of vehicle imports to Nigeria in 2023.

To put that in perspective, the terminal has gone from an average of 300,000 vehicles being offloaded by its vessels to less than 100,000, and that is if they are lucky, and the figures are still dropping.

It is hard to find a vehicle in Nigeria without a significant fault code or a dashboard full of fault codes and pending car issues largely ignored because a “mechanic” told them, “E no mean anything”

Some of the reasons for this include the dwindling spending power of the average Nigerian as a result of multiple economic challenges that successive governments don’t seem to have a clue of how to solve, the rising cost of petrol, scarcity and volatility of foreign exchange as well as the devaluation of naira that has seen income remain the same but purchasing power drop significantly. Also, the increased local clearing costs by the Nigerian customs service and the introduction of new surcharges, to mention a few, all together skyrocketed the total price of vehicle importation.

For clarity, a 2005 Corolla that could be bought, shipped, and cleared for less than 2 million naira as at 2019 will now cost you at least 5 – 6 million naira in 2023 in spite of the generally reducing cost of purchase at the used car auctions in the US being an 18-year old vehicle. To many Nigerians, owning a car is a status symbol and something to aspire to. And being the resilient and tolerant people we are, are now adapting by settling for locally-used/refurbished or Nigerian-used vehicles.

But are locally-used vehicles the smart way to go?

Buying locally-used vehicles definitely comes with a lot of advantages. For example, you don’t need to wait for the usual 6 – 8 weeks timeline for shipping. You can view, assess and even test drive before buying and more importantly, you can pay in Naira without having to bother about the hassle of sourcing FX and being able to make an international wire transfer to pay for an imported vehicle.

In spite of these, a combination of human and environmental factors in my opinion, largely makes buying locally-used cars a not-so-smart alternative.

Read also: Bittersweet boom of ‘Tokunbo’ cars in Nigeria

To start with, buying a locally used vehicle in Nigeria is mostly a money-drainer and almost the same as buying a lemon from foreign used car auctions. Many car owners, for reasons ranging from cost to just general carelessness often tend to either cut corners with maintenance by “managing” what should be changed, compromising on oil quality that is, using 20W – 50 oil instead of the manufacturer-approved 5W – 30, patronizing quack trial and error mechanics simply because they can pay N2000 for an oil change.

You go under the hood of some vehicles and the “wiring” alone is a cause for concerns with so much cutting and joining. Even considering the operation of the vehicle, many first-time users of Tokunbo vehicles are guilty of little things such as bad vehicle hygiene and allowing mud to dry on the undercarriage, shocks, bearings and arms before cleaning it. Attacking potholes as if the vehicle is a military tank, use of dangerous fuel additives in the name of injector cleaner or fuel saving, and even filling up tanks to the brim in times of panic buying. And let’s not even go into the quality of fuel or the general state of Nigerian roads.

It is hard to find a vehicle in Nigeria without a significant fault code or a dashboard full of fault codes and pending car issues largely ignored because a “mechanic” told them, “E no mean anything”, simply visit a large parking space like the major shopping malls, look on the floor to see dried or wet puddles of all types of oils; leaky cars.

When we go down to the spare parts available in the market, it is often used parts that are either dead or near the end parts. Some of these used parts are even from locally used cars stripped at vehicle scrap markets like Owode-Oniirin. In the case of “brand new” what you mostly have are substandard low-quality “china” parts that cause more harm than good.

Don’t let us even go into the super cleanup/detailing and flushing of vehicles by some owners, mileage/odometer rollback, or even blotting out of fault codes and Check engine lights to disguise the true condition of the vehicle.

Read also: Rising inflation puts new, ‘Tokunbo’ cars out of reach

Finally, anyone who has bought a locally used vehicle would tell you that it is simply a game of luck and they only found something “manageable” maybe after inspecting lots of vehicles that still cost hundreds of thousands in repairs, bodywork and painting before it became drivable.

Some will argue that it is a used car and not a new one, and all of these are to be expected. But once you keep in mind that the “Tokunbo” cars we call new in this part of the world are also used cars, some with multiple owners prior, then it becomes easy to understand why if you can, it is better to opt for foreign used vehicles. For the simple reason that they would cost you significantly less to maintain, and still give a good resale value compared to a locally used option, thanks to relatively better maintenance.

Today, whether you are buying a locally used vehicle or a “Tokunbo” vehicle, you will still spend millions of naira and with vehicles being depreciating assets will always need maintenance and repair. Wouldn’t it be a better option to save up some more (if you can) to be able to buy something that would be a good use of scarce resources with less headache, instead of going for an option that is most likely going to drain you financially and would end up being sold as scrap?

However we chose to spin it, a foreign-used 2010 Honda Accord all factors considered would always be better than a locally used 2018 model, in my opinion, but the choice is yours.

Amisu is a car enthusiast, auction expert, and regional director, Auto Auction Mall, Copart Authorised partners