Millions of Nigerians hoping the Federal Government’s latest reduction in vehicle import duties will finally make cars affordable may have to lower their expectations.
Although the policy has been celebrated as a major relief for motorists and dealers, a Pinnacle Daily investigation has found that the reduction affects only a fraction of what importers actually pay to bring vehicles into Nigeria.
Industry operators say the biggest determinant of vehicle prices remains the exchange rate, while multiple port charges, shipping costs, insurance, documentation fees and terminal delays continue to inflate the final selling price.
The findings contradict widespread claims circulating on social media that vehicle prices will crash immediately following the tariff adjustment.
Instead, interviews with automobile dealers in Lagos and Abuja reveal that Nigerians may wait months before seeing any noticeable reduction and even then, the savings could be far smaller than many expect.
The optimism followed an announcement by the Comptroller-General of the Nigeria Customs Service (NCS), Bashir Adeniyi, during the defence of the Service’s 2026 budget before the House of Representatives Committee on Customs and Excise.
Under the revised tariff regime, import levy on used vehicles was reduced from 15 per cent to five per cent, while the levy on brand-new vehicles dropped from 20 per cent to 10 per cent.
According to Adeniyi, the measure is aimed at cushioning the impact of the Green Tax Surcharge, encouraging cleaner vehicles and stimulating economic activities.
Within hours of the announcement, social media platforms were flooded with videos claiming Nigerians could now import vehicles at significantly lower prices, with some urging prospective buyers to bypass dealerships altogether.
However, the reality appears far more complex.
“The dollar still decides the price”
Speaking with Pinnacle Daily, Chief Executive Officer of Lowkey Motors, Oluwafemi Modupe, described the tariff adjustment as positive but warned that many Nigerians misunderstand what was actually reduced.
According to him, the exchange rate, not import duty, is still the single biggest factor determining vehicle prices in Nigeria.
He explained that every imported vehicle is purchased in dollars, meaning fluctuations in the naira continue to outweigh reductions in import charges.
“The most important factor in importation is still the dollar exchange rate,” he said, noting that although the naira has remained relatively stable over the past six months, the tariff adjustment alone cannot trigger the dramatic price cuts many buyers anticipate.
Modupe further explained that many Nigerians mistakenly believe Customs reduced the entire import duty.
Instead, he said, the standard import duty remains at 20 per cent.
What changed is the import levy, which fell from 15 per cent to five per cent.
Beyond these, importers continue to pay Green Tax, ETLS charges, CISS fees, a seven per cent surcharge and several statutory port charges.
When combined with insurance, freight costs and the vehicle’s purchase price under the Cost, Insurance and Freight (CIF) valuation system, the savings become significantly smaller than many consumers imagine.
Why a ₦13 million car may barely become cheaper
To illustrate the impact, Modupe said a vehicle whose total landing cost previously stood at around ₦13 million may only become approximately ₦500,000 cheaper after the revised levy.
According to him, this is because the levy represents only one element of the overall import cost.
“The reduction is not as significant as people think. The exchange rate still determines almost everything,” he said.
He added that social media claims suggesting cars would suddenly become several million naira cheaper are unrealistic and have created false expectations among buyers.
The investigation also found that customs duty represents only part of what importers eventually pay.
Dealers identified terminal handling charges, shipping costs, demurrage, documentation fees, insurance, trucking expenses, auction fees, inland transportation and port delays as additional costs that continue to inflate vehicle prices.
According to Modupe, network failures and bureaucratic bottlenecks at Nigerian ports often delay cargo clearance, forcing importers to pay demurrage that can quickly wipe out whatever savings the lower levy provides.
These expenses, he argued, receive little public attention despite having a significant impact on vehicle pricing.
READ ALSO:
- Imported Petrol Cost Rises above Dangote Refinery Fuel
- Customs Alerts Nigerians to Fake Recruitment Advert, Warns Job Seekers Against Scams
- Customs Seizes N273.6m Contraband in Cross River, Intensifies Anti-Smuggling Operations
- Why Nigeria’s Petrol Imports Jump 207% in One Month
Another reason Nigerians are unlikely to see instant reductions is inventory.
Most dealers are still selling vehicles imported under the previous tariff regime.
Having paid higher import costs months ago, many cannot afford to slash prices immediately without incurring substantial losses.
Industry operators estimate it could take between two and four months before newly imported vehicles cleared under the revised tariff begin influencing prices across the market.
The report also found growing misinformation surrounding direct vehicle importation.
Many online agents now advertise simplified import services, claiming Nigerians can avoid dealerships and save millions.
But dealers interviewed by Pinnacle Daily warned that first-time importers often underestimate the complexity of the process.
They cited hidden agency fees, auction charges, trucking costs within the United States or Canada, documentation requirements, shipping arrangements, customs procedures and port clearance costs as challenges that inexperienced buyers rarely anticipate.
According to Modupe, without experienced clearing agents, many buyers end up spending almost the same amount—or even more—than purchasing from established dealerships.
Abuja dealer sees brighter outlook
Not every dealer shares the same level of caution.
In Abuja, the Chief Executive Officer of Ebaba Global Autos, Emson Abah, believes the reduction will have a more noticeable impact, particularly on newer and “Belgium” vehicles.
Abah told Pinnacle Daily that vehicles previously selling for between ₦16 million and ₦17 million are already being offered within the ₦13 million to ₦14 million range in some cases.
However, he acknowledged that used vehicles imported before the policy change are unlikely to experience immediate reductions because dealers must first recover existing investments.
Like his Lagos counterpart, he expects the market to adjust gradually over the coming months as older stock is replaced with vehicles imported under the new tariff regime.
Dealers want more than lower duties
While welcoming the government’s decision, dealers insist that tariff reductions alone cannot transform Nigeria’s automobile market.
They are calling for the removal of unnecessary port charges, faster cargo clearance procedures, improved transparency in customs processes and the elimination of bureaucratic bottlenecks that continue to increase import costs.
Industry operators also argue that maintaining exchange rate stability may ultimately do more to reduce vehicle prices than cutting import levies alone.
The Federal Government’s tariff adjustment has undoubtedly provided relief to vehicle importers and signals a willingness to review Nigeria’s import tax structure.
Yet Pinnacle Daily’s investigation shows that expectations of an immediate crash in vehicle prices are premature.
Until Nigeria addresses exchange rate volatility, streamlines port operations and tackles the numerous charges embedded in the import process, cheaper import duties alone are unlikely to deliver the affordable vehicles many Nigerians have been promised.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.