Kekemeke Karatei realised he had saved up more hope than cash after arriving at the car lot to be informed that the N6 million he had been nursing for many months to finally own a 14-year-old used Honda was only sufficient to get him something even older and at a bargain.
- +Nigeria’s middle class wanted better cars. The naira had other plans
In his 30s and closing in on his call to the bar, he knew he needed better mobility options around Lagos if he was to settle down properly.
In his 30s and closing in on his call to the bar, he knew he needed better mobility options around Lagos if he was to settle down properly. “I kept saving, just in case the heavens bless my pocket, maybe I would get my choice.” His choice was a 2012 Honda Crosstour. “But I eventually settled for a 2008 Toyota Camry Muscle, influenced by the degree of my financial muscles,” he told BusinessDay.
Karatei’s experience is similar to that of several Nigerians whose quest for imported, fairly used cars, also known as Tokunbo, has met the brick wall of never-fulfilled dreams for the aspirational middle-income class.
Car prices in Nigeria’s used vehicle and secondary car market have more than doubled in the last decade, fuelled by a depreciating Naira that has raised purchasing costs and duties paid by importers and resellers amid stagnant income levels.
After the Central Bank of Nigeria (CBN) floated the currency in 2023, collapsing multiple windows into a single market system, the naira went into freefall. That liberalisation, while welcomed by investors and multilateral institutions as a long-overdue correction, unleashed a wave of volatility that stripped the currency of more than half its value.
The triple-digit rates that had held for years phased out as the naira charted a new course with stability as a priority. It currently trades above N1,360 to the dollar in the official market, pushing up costs priced in the American currency.
“A vehicle that cost N8 million two years ago is between N18 and N22 million today for the exact same unit,” Ayodeji Alao, founder of Rehoboth Auto Connect, told BusinessDay. His company sources vehicles from auctions in the United States and ships them on Roll-On and Roll-Off (RORO) vessels to Tin-Can Island in Lagos.
According to the International Trade Administration, the US is the largest supplier of used passenger cars and spare parts to Nigeria’s used car market, which is estimated at $1.18 billion by Modor Intelligence, a market intelligence firm.
That number is expected to reach $1.27 billion this year. In the first quarter of 2026, the country spent N284 billion on used diesel vehicle imports, according to the National Bureau of Statistics, 118 percent more than in the corresponding quarter of 2025.
“People who bought a 2017 Highlander for N9 million in 2022 have seen better returns than most investment accounts,” Alao said. “Add port delays and customs duties going up year on year, and the supply of clean vehicles has tightened.”
Importers of used cars in Nigeria face a layered tariff structure that begins with a 20 percent Customs import duty on the Cost, Insurance and Freight (CIF) value, followed by a 7 percent surcharge computed on the duty. It is followed by a 15 percent National Automotive Council levy, a 0.5 percent ECOWAS Trade Liberalisation Scheme levy for vehicles sourced within West Africa, and a 7.5 percent Value Added Tax.
Last year, the Nigeria Customs Service unsuccessfully tried to implement a controversial four percent Free on Board (FOB) levy to replace the one percent Comprehensive Import Supervision Scheme (CISS) that would have lengthened the bill.
Babatunde Adekoya, a clearing agent specialising in vehicle trade, told BusinessDay that a 2012 Toyota Corolla or Honda Accord, currently being sold for between N11 million and N16 million in the market, according to findings, would have incurred up to N1.5 million in import duties, 100 percent more than it would have ten years ago. That is, in addition to N2.5 million in clearance fees, he said.
The Japanese brands are in high demand and hold a controlling market share due to consumer perception of their reliability and fuel efficiency.
Oluwaseyi Oduola, an automobile industry expert, reckons that shipping costs are contributing to the squeeze.
Deals for used vehicle shipments are typically made to Nigerian importers on a Free on Board (FOB) basis, which means that once the vehicle is handed over at the port of export, the responsibility of paying for shipping, insurance and the car itself shifts to the Nigerian buyer or their agent.
According to information extracted from logistics firms, including BR Logistics, SGK Global and AES shipping, it costs between $1,200 and $4,500 to ship a car to Nigeria from a port in the United States, depending on the method.
RoRo vessels cost between $1,100 and $2,500. Shared containers, which present the most economical method for transporting accident cars from US auctions, cost between $1,800 and $2,500, while sole-use container shipping costs between $2,500 and $4,500, depending on the container.
Elsewhere in the Middle East, a war that has gone on for over three months now has spurred major shipping lines to pile on emergency conflict and fuel surcharges to compensate for the immense operational costs of vessel shortages, longer sailing distances and oil shocks.
Meanwhile, prices appear to be moving everywhere except in workers’ paychecks. Double-digit inflation persistently burrows into the earnings of a 240 million population where the minimum monthly wage of N70,000 ($51) is barely enforced, forcing many Nigerians to choose between buying food or a car.
“My money is not meant for me alone. I have a wife and a son. I have siblings, too, that I take care of. If you look at what you spend on feeding, rent and some other things, where’s the money for a car?” said Abayomi Karounwi, a young man in his 30s who commutes several hours every week to his job as a security guard in Lekki, one of Lagos’ affluent communities.
His N150,000 ($109) monthly salary has refused to budge. At his current income level, Karounwi said he will need to save “for at least five years” to afford a Tokunbo and three years for a Nigerian-used vehicle. His dream car, he said, is a Mercedes-Benz.
Yet, Karounwi fears that even after meeting his savings target, like Karatei, the price would have risen again. “If I say I want to save from January to December, before the middle of the year, the price will have risen again. I know. I have all these dealers on my TikTok, so I do follow up with them,” he said.
Apart from the sense of pride Karounwi said owning a car will bring him and being able to skip his family the hassle of public transportation to church and other events, he also said he could consider offering ride-hailing services to earn extra cash.
The boom in ride-hailing services like Bolt, Uber, InDrive and LincRide, which provide a steady source of income for thousands of drivers, has created a massive, highly specific demand for a particular tier of imported used vehicles.
