The demand for used cars in Nigeria has increased despite high inflation and declining GDP.
According to Insider Business, a recent market analysis by Modor intelligence has revealed that the prices of new cars increased significantly as of July 2023 as a result of the naira depreciation and an increase in exchange rates for clearing imports, which had a 15% impact on the prices of new cars.
Buyers’ preferences have since then changed to include obtaining imported used cars, particularly “Tokunbos,” which are well-liked for their dependability and affordability.
Furthermore, consumers can now more easily access vehicle information, compare prices, and make well-informed decisions when buying a used car thanks to the rise of online auto platforms.
According to the report, “more buyers are choosing to browse, negotiate, and finalise deals on online platforms like Cars45, Carmart, and Jiji.”
According to the report, Nigeria’s used car market, which is currently valued at USD 1.14 billion, is expected to grow at a compound annual growth rate of 8.9% until it reaches a net valuation of USD 1.74 billion in 2024.
This is partially because Tokunbo car prices shot up by nearly 100% after the Nigeria Customs Service raised the import duty on vehicles from 39.45% to 39.62% in June 2023 in an effort to decrease reliance on imported cars and support homegrown automakers.
After the release of the information, it was predicted that a 2005 Toyota Corolla model that sold for an average price of Naira 1.9 million (USD 2,519) in 2021 was being sold at Naira 4 million (USD 5,305) in June 2023, while a 2004 Honda Accord of Naira 1.6 million (USD 2,122) on an average was being sold at an average price of Naira 2.9 million (USD 3,846).
Thanks to their lower price when compared to their counterparts in the sports utility vehicle and multi-purpose vehicle markets in Nigeria, used sedan cars continued to be the preferred option for consumers willing to buy used cars, according to another intriguing finding from the report. As of June 2023, the Toyota Corolla, Toyota Camry, and Honda Accord were among the most popular used sedan models in Nigeria.
