The Nation Newspaper

Tag: Tokunbo vehicles

  • Eight things to consider before buying Nigerian-used, Tokunbo vehicles

    Eight things to consider before buying Nigerian-used, Tokunbo vehicles

    As the price of Tokunbo (imported second-hand) vehicles escalates due to high import duties, taxes, and high exchange, resulting in excessive landing costs, more Nigerians who ordinarily would not have given a second thought to Nigerian used vehicles are doing so now.

    Moreover, the majority of tokunbo car dealers have diverted to selling Nigerian used cars as they are finding it increasingly difficult to import cars.

    According to Mr. Tunde Keshinor, General Manager, Ports and Terminal Multipurpose Limited (PTML), vehicle importation dropped from 45,000 units between January and June 2023 to 18,000 between January to June this year. PTML is a foremost roll-on-roll-off terminal in Nigeria handling between 60 – 70 percent of vehicles imported into the country.

    However, whichever one you want to buy, whether a tokunbo or a Nigerian used vehicle, there are important things you must consider before parting with your money in order not to regret your purchase.

    Do a thorough research

    The first thing to do before purchasing anything, especially cars, is to research the kind of cars you want, how they function, the pros & cons of the cars, etc. Ask people such as car bloggers, mechanics, or those who have used the same models to give you advice about the car(s).

    Read Also: 24 Diaspora Nigerians awarded for contribution to economy

    You can also check for online reviews of the car brands and car dealers you wish to buy from. Don’t give room to guesswork, research thoroughly and be sure you are satisfied with your findings. One key finding you can make is to know the resale value of your desired list of cars, if you are a person who would like to resell the car after using it.

    Determine your budget

    After carrying out your research, the next thing to do is determine how much you are willing to spend on a car. This is why it is important to have a list of cars of different prices so that if one is beyond your budget, you can get another that is within your budget.

     Compare prices

    The price is a crucial factor. In order not to be outdone in the bargaining process, it is best to do your homework before approaching a dealer in used cars. You should try to visit more than one dealer to know how each is selling his car.

    Consider the cost of maintenance

    It is often said that acquiring a car is synonymous with marrying a new wife. This means the cost of maintaining the car to look good and serve you well must be factored in before buying it. The yearly cost of maintaining some cars can buy some other ones. Some cars demand specialized maintenance such as the kind of engine oil used, etc.

     Always consider the easy availability of parts in case of repair and replacements.

    Check the mileage of the car

    The mileage of a car refers to the total miles covered by a vehicle, especially in a given period. The mileage will disclose how long the car has been used, how long it has run, and also how much it should be sold for. If you are to buy a car for instance in the USA, an average of 13000 miles per year is expected, 7000 miles for the UK and 15000 miles for Canada.

    As a general rule of thumb, 12000 – 15,000 miles a year is considered an “average” number of miles per year. So, a car that is five years old would have about 75,000 miles to be considered ‘average.’ Anything significantly more and a car is considered to be ‘high mileage.’ Anything significantly less, and it’s a ‘low mileage’ car.

    But, don’t assume a car is in good condition because it has ‘low’ or ‘average’ miles — or that it is in bad condition if it has ‘high’ miles.

    It is also worthy to note that some car dealers tamper with the odometer to alter the mileage. This is used to deceive novice or ignorant car buyers.

    Take a look at the Vehicle Identification Number

    The V.I.N is a very helpful thing for you when buying a used car. It will show you the car’s history, even legal or stolen issues. So don’t forget to ask the seller for the V.I.N.

    Go to the dealer shop with an experienced car user

    An experienced car user like an auto mechanic should follow you to the place you want to buy the car from. The experienced personnel would know all the things to check and would advise you whether you should pick the car or not. There are lots of unreliable and untruthful car dealers out there; you have to be smart in beating them in their game.

    Inspect the car engine

    You must test drive the car before you make a final decision. However, before test driving, there are many things to inspect; these things include but are not subject to the following:

    Ensure the car is a flat surface before you take a look at it

    Check out the paint job and keep an eye out for dents, scratches, and rust spots

    Take a look into the trunk to be sure it is still in good condition

    Don’t forget the tyres

    The frame of the car is crucial, if it is damaged, ask questions

    Look out for under-body rust especially if you can get beneath the car

    Have a look at the belts and hoses

    Don’t overlook any corrosion or leak

    When you pull out the transmission dipstick – If the fluid is not pink or red, there’s a problem

    What is the condition of the timing belt?

    Have a look inside the car to see if the air-conditioning system works the way it should

    The odometer is very critical as it shows you the mileage

    If the car has a computer in it, watch out for odd warning signs when you start the car

    Check out all the lights in and around the car

    Test the brakes by pressing down hard on the brakes to decelerate – Be careful not to overdo this to avoid sliding

    Be on the lookout for clunking sounds when driving and making turns

    Request for the car’s history.

     A car is an important part of the average family life in Nigeria, so it is important to get one. However, you must be careful in buying used cars, be it tokunbo or Nigerian used. If you follow all we have analysed here, you will definitely buy a very good used car and get a good return on your purchase.

  • Tokunbo vehicles’ 35 % levy begins April 30

    Tokunbo vehicles’ 35 % levy begins April 30

    The 35 per cent levy on imported used vehicles (aka Tokunbo) will begin on April 30, the Nigerian Automotive Council (NAC) has said:

    In a statement, the council said: “The automotive policy has five elements, one of which is market development. Under market development, tariffs are increased on Fully Built Unit (FBU) vehicle imports. These tariffs are to be reduced gradually over the years, as the vehicle assembly and local content operations gain momentum.

    “The Nigerian vehicle market is approximately 400,000 vehicles annually, with about 300,000 imported as used. Hence the government has to balance vehicle supply and affordability with the production by the assembly plants.

    “ The following are the measures in the policy to ensure vehicle supply and affordability, Complete Knocked Down (CKD) and SKD tariffs are 0%, 5% and 10% respectively.

    “Assembly plants to assemble affordable vehicles. Assembly plants will import two FBU at concessionary duty for every one CKD/SKD they assemble in 2014/15. It will be one to one in 2016/17.

    “New investors will also be able import FBU at concessionary duty in numbers to fill the gap between the supply by the assembly plants and demand.(v) Affordable vehicle financing scheme to be set up to enable new vehicles purchase by Nigerians.

    “The government earlier deferred the imposition of the levy on used cars to December 31st 2014 to enable assembly plants ramp up enough production to satisfy demand.

    “As you know, VON is assembling Hyundai and Nissan cars, PAN is assembling Peugeot cars, IVM has started assembling cars, and Dana Motors is assembling Kia cars. VW, Honda and Renault, among others, are expected to start assembly operations next year. VON, IVM and Kia also have cars costing N1.5m-N2.0m. So the industry can produce the vehicles we need in 2015.”

    The statement added that arrangements for the establishment of the affordable vehicle finance scheme suffered delay of about four months due to the Ebola Virus Disease.

    “The staff of the collaborating bank, Wesbank of South Africa, delayed their planned trip to Nigeria to set up operations from September 2014 to January 2015. Hence, the new date for the start of operations of the financing scheme is April 2014. Accordingly, the CME/HMF has been asked to extend the levy deferment on used cars to 30 April 2015.”

  • Fed Govt imposes 70 per cent tariff on Tokunbo vehicles

    Fed Govt imposes 70 per cent tariff on Tokunbo vehicles

    The Federal Government has directed the Nigerian Customs Service (NCS) to collect 35 per cent duty and 35 per cent levy (on the cost of the vehicle) on every imported used (popularly known as Tokunbo) vehicles  from July 1.

    The Nation gathered that the directive is contained in a circular No: BD/FB/09/224 dated February 28 and another circular No: NAC.993/5 dated April 28.

    It was gathered that the Customs at Tin-Can Island port and other terminals in Lagos have commenced full implementation of the directive.

    Under the new policy,  Fully Built Unit  (FBU) cars would attract a duty of 35 per cent and 35 per cent levy.

    “If the bill of lading is dated not later than March 31, and its arrival date is not later than June 30, (you) will pay old duty rate irrespective of the date of opening of Form ‘M’ and letter of credit.

    “Whereas, used vehicles will be imported at 35 per cent duty rate without levy till June 30, this year,” the circular added.

    Commercial vehicles, such as Danfo bus, which paid only 10 per cent duty, are to pay 35 per cent duty and 35 per cent levy by the importers.

    The new policy has been uploaded into all Customs systems, making it difficult for importers or their agents to pay old rate.

    A senior Customs officer who carved anonymity said the policy ought to have started on January 1, if not because of the position of the Controller General of Customs Alhaji Dikko Abdullahi that its implementation should come to effect now.

    Custosms Public Relation Officer at Tin-Can command said the 35 per cent duty on used vehicles has been enforced by Customs formations across the country.

    “The Circular is a Federal Government circular that has to be implemented by all Customs commands,” Osunkwo said.

    But the National President, Association of Nigerian Licensed Customs Agents (ANLCA) Alhaji Olayiwola Shittu said most agents had wished that the implementation commenced in July.

    “There is no reason for the government to start collecting 35 per cent duty on used vehicles now and imposed another 35 per cent levy in July. We had expected that the full implementation of the policy would commence in July, if the government is determined to go ahead with the policy despite the public outcry against it,” Shittu said.

     

  • Govt: Tokunbo vehicles not banned under auto policy

    The Federal Government did not ban the importation of tokunbo vehicles under the controversial auto policy, the Customs has said.

    The implementation of the policy, the Customs said, would take off on February 28.

    The policy, it said, only seeks to encourage the growth of local industries and discourage the importation of tokunbo vehicles through high protectionist tariff.

    Last October, the government unveiled new duties and levies for imported new and used vehicles and imported new tyres.

    Under the policy, a fully built car will attract 35 per cent duty and another 35 per cent levy of the vehicle cost, raising the tariff from 20 per cent to 70 per cent.

    Customs Public Relations Officer Mr Wale Adeniyi said the implementation of the tariff had yet to start because the Service is waiting for the February 28 take-off date.

    Adeniyi said the Service had not received any order banning the importation of used vehicles.

    But some dealers of imported vehicles told the paper that the new rate would translate into an increase of 60 per cent on prices of imported cars.

    They also estimated that cars being sold for between N3 million and N5 million would be sold at between N4.8 million and N8 million, while tokunbo vehicles selling for N800,000 would go up to N1.28 million.

    Six auto dealers, including Elizade Motors, Globe Motors, Coscharis Nigeria Limited, CFAO Motors, SCOA and Toyota Nigeria Limited, acting under the Auto Manufacturers’ Representatives Group in Nigeria, also protested against the new policy which was approved by the Federal Executive Council ( FEC) on October 2, last year.

    In a petition sent to President Goodluck Jonathan , the group accused one of them Stallion Group of Companies of having unfair access to the contents of the policy ahead of the announcement, thereby creating an unfair competition over others.

    In the petition, the group alleged that Stallion Group made use of its privileged information to open letters of credit of about $382 million which covers three years of import for 20,000 cars. The group also alleged that the speed with which Stallion Group opened the letters of credit on October 2, last year, while the FEC was still deliberating on the policy, indicated it did to beat the deadline and gain unfair advantage over others

    The group warned: “ The Federal Government will be committing a grave error if such a group is giving monopoly over the automotive industry in Nigeria.”

    It urged that a fair and level playing field be provided for all the importers to compete.

  • Prices of new, Tokunbo vehicles may go up

    Prices of new and fairly used vehicles may be high following the introduction of new fiscal measures on imported vehicles.

    Under the measures import duty payable on new and fairly used vehicles rose from 20 to 70 per cent.

    Sources at the Ministry of Finance said the Finance Minister and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, sent a memo to the Comptroller-General of Nigeria Customs Service (NCS), Alhaji Dikko Abdullahi directing him to collect 35 per cent duty on imported fully built unit (FBU) cars and 35 per cent levy, bringing to 70 per cent the total charges to be paid by the importers.

    A source, who spoke on condition of anonymity, said a copy of the November 14 memo, was also sent to the three service providers at the airports and seaports: Global Scan System and SGS Nigeria Limited, Cotecna Destination Inspection Limited and the Federal Inland Revenue Service.

    The source said the government introduced the policy following the coming of the automotive industry development plan about six weeks ago.

    He said the policy was designed to boost activities in the industry and also attract local and foreign investors into the nation’s moribund auto-motive industry.

    The source said, the memo sent by the Finance Minister on the increase in duty, from the present 20 per cent, is in tandem with the announcement made recently by the Minister of Trade and Investment, Mr Olusegun Aganga.

    As part of the new policy anonounced byAganga, local auto manufacturers, such as VON Automobile Limited (formerly Volkswagen), Ojo, Lagos; National Trucks Manufacturers, Kano; Innoson Vehicle Manufacturing Limited, Nnewi, Anambra State; PAN Nigeria, Kaduna and other auto makers in the country, will no longer pay duties or levies on their Completely Knocked Down (CKD) sets imported from their overseas partners while Semi-Knocked Down (SKD) components for the local production of vehicles shall attract only five per cent duty without levy.

    The above measures, the source said, was taken by the government to create an environment to support existing assembly plants and attract other vehicles spare part manufacturers who have expressed interest in investing in the country.