• Sunday, June 23, 2024
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Bittersweet boom of ‘Tokunbo’ cars in Nigeria

Nigerians shift to locally used cars as prices soar on volatile naira

In Nigeria, used automobiles imported into the country from Europe, US, and elsewhere, known locally as Tokunbo have afforded most Nigerians opportunities to own a car. Yet, it has been a bittersweet experience of sorts.

Nigeria, according to the United Nations Environment Programme (UNEP), is the major African country that imports the most used vehicles from the United States. Nigeria is ranked only behind the United Arab Emirates (UAE) and Mexico in the report.

According to a report by the National Bureau of Statistics (NBS), Nigeria spent a total of N695 billion, on the importation of passenger cars alone in the fourth quarter of 2021.

When compared to the cost of new cars, ‘Tokunbo,’ also known as second-hand cars, is what most people can buy, considering purchasing power. Tokunbo cars are often used for a long time, sometimes more than ten years, before being sent to Nigeria for resale. The older the car, the cheaper it is bought for importation to Nigeria, where dealers hope to make good margins. Here, they are also used for some time before being resold.

A car dealer who prefer to be anonymous said he deals with tokunbo cars because it is cheaper to get and it sells faster. For Segun Amao, a car owner, he expressed preference for Tokunbo cars that have been imported into the country over Nigeria used cars. Even when bought as brand new in Nigeria, he explained that even when said to be in good condition, one ends up regretting buying them due to variables such as bad roads and poor car management before it is resold.

Read also: Customs replaces NAC on used cars with 15% levy – agents

Amao also said some imported used cars arrive with minimal repairs and others do not and that he was fortunate to receive one with minor repairs, noting that luck is typically involved.

Amao continued, “White males have good records of their cars, from the day of purchase to the day of sale, giving you insight into the kind of vehicle you’re about to acquire and then calculating the cost of repairs if any are needed.”

From the standpoint of sales, the anonymous car dealer indicated that non-accidental/non-repair tokunbo are more expensive, yielding less profit and taking longer to sell, as opposed to accident vehicles or cars that require few repairs, which are less expensive and yield more profit.

He also noted that 80 percent of cars in Nigeria are accident cars, and people request them because it is cheaper.

Buying non-accident automobiles or no-repair-tokunbo, according to the car dealer, is similar to buying a new car because the merchants are aware of the car’s condition and are honest to tell the truth, especially if there has been an issue with it. Meanwhile, buying accident cars comes with surprises and is more of a gambling game.

He also mentioned that the constant increase in the exchange rate, increase in import duty, and shipping costs are part of issues with Tokunbo vehicles. Also, there are often cases of cars being damaged at the port.

Kayode Aliu, another car owner, stated that he prefers to buy imported old cars since he cannot afford brand new cars, but that there would always be something to fix after they are purchased.

“Cars will always have problems, they are not furniture that you use forever, you have to keep changing one spare part to the other.”