New vehicle fleet purchases drop 90% in 4 years

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Corporate organisations financial ability in the purchase of brand new vehicles as pool cars and other logistics needs in Nigeria have dropped abysmally to 90 percent in past four years as result of the 70 percent on imported brand new vehicles, BusinessDay findings revealed.

Instead of the preference for brand new vehicles before the imposition of the 70 percent tax, many of them including the banks, insurance firms, oil companies, have in the past four years chosen to be refleeting their vehicle pool especially with used, including accidented vehicles from the different countries of origin that are imported into the country and subsequently fixed and refurbished.

Over time, many of the accidented that were later refurbished with its attendanted long or short susceptibility to crashes as a result of some of the defects that accompanied it upon entry are eventually sold as pool cars to the corporate institutions at cheaper prices.

This ugly situation has become worrisome when many Nigerians yearn to own a car of their own, but paying fully for one is a luxury aand most of them can’t even afford it in this economy when leading an active life requires mobility.

Reacting on the reasons for his company’s preference for used instead of brand new vehicles, Kelly Emeka, a finance manager of one the corporate institutions in Lagos told BusinessDay that, the move to settle for tokunbo cars was as a result of affordability due to the astronomical increase in the prices of new cars that has hit the roof top.

According to Emeka, ‘’As the period begin to witness shrinking economic activities and companies begin to witness reduced revenues and rising overhead cost, thereby making funds unavailable for new cars purchase, it becomes increasing imperative to make adjustments in the day-to-day … Read More...