See how how much salary earners need to afford a car in 2025

• It is present much hard for wage earners successful Nigeria to ain a car amid rising ostentation and depreciation of the naira
• A caller study shows that an mean wage earner could instrumentality up to 5 years of hard savings to spend a bully car
• There are different options for redeeming to bargain captured successful the report, which see a loan, borrowing from household and friends

Legit.ng journalist Dave Ibemere has implicit a decennary of acquisition successful business journalism, with in-depth cognition of the Nigerian economy, stocks, and wide marketplace trends.

Owning a humble car successful Nigeria’s commercialized capital, Lagos, is progressively becoming a luxury alternatively than a necessity, according to a caller study by Cowrywise.

The study highlights the fiscal load and pugnacious choices a Nigerian idiosyncratic indispensable marque to execute the imagination of owning a car, adjacent if it is used.

Buying a car for an mean Nigerian wage earner could instrumentality much than 5 years Photo credit: Ina Fassbender / Contributor
Source: Getty Images

Car gets much expensive

The new study titled “The Economics of Owning a Car” revealed that the full outgo of owning a locally utilized 2005 Toyota Corolla successful Lagos has climbed to N22.7 cardinal implicit 5 years.

This fig includes acquisition price, fuel, maintenance, regulatory fees, repairs, and depreciation. Even aft factoring successful the vehicle’s resale value, the wide outgo remains astatine N18.9 million.

The study explains:

"If Sola purchases a cleanable Nigerian-used Toyota Corolla for N4.9 cardinal (the estimated mean outgo of a Nigerian utilized car), the existent outgo of ownership goes acold beyond the sticker price. She volition person to walk astir N234,000 monthly, oregon N2.8 cardinal annually, connected attraction and related expenses."Over 5 years, her full outgo climbs to N22.7 million, but factoring successful resale worth brings it down to N18.9 million."

How overmuch wage is needed to ain a car?

To debar fiscal strain, Cowrywise recommends that individuals allocate nary much than 10 to 15% of their nett monthly income to transportation, successful enactment with the wide cited 50/30/20 budgeting rule.

Two options for wage earners to ain a car

Cowrywise noted that a car proprietor would request to gain betwixt N1.2 cardinal and N1.5 cardinal per period to spend the conveyance comfortably, an income scope typically associated with adjunct managers successful commercialized banks oregon elder associates successful concern firms.

It said:

"Owning a car is simply a large fiscal commitment."

What this means is that young professionals successful Lagos, owning a car has go much of a fiscal strain than a awesome of progress.

The study added:

"For young professionals similar Sola, the travel to car ownership typically follows 1 of 2 routes: redeeming to bargain oregon borrowing to buy. Each way comes with chiseled fiscal implications and manner tradeoffs."Sola could prevention N415,000 per period for 1 twelvemonth (with an estimated 20% return), oregon N217,000 per period implicit 2 years (yielding astir 16.5%)."Alternatively, she could money the acquisition done a operation of a unit indebtedness (N3 cardinal astatine 15% per annum) and a integer indebtedness (N1.9 cardinal astatine 84% per annum), resulting successful monthly repayments of N575,000."

While borrowing enables quicker entree to car ownership, the precocious outgo of credit, particularly from integer lenders, can make important fiscal strain.

In contrast, saving, though slower, offers a much unafraid and sustainable way to ownership, BusinessDay reports.

Nigerian workers to prevention much to bargain utilized cars Photo credit: Nurphoto
Source: Getty Images

Alternative to owning a car

The study besides revealed that choosing to commute utilizing ride-hailing services is besides precise expensive.

The study noted that a wage earner could walk up to an mean of N461,000 monthly, translating to N5.5 cardinal annually connected transportation, which surpasses the semipermanent outgo of owning a vehicle.

It added:

"Public transport remains the astir affordable astatine astir N1.4 cardinal a year, but it comes with trade-offs, including delays, information concerns, and unpredictability."

Car trader says idiosyncratic paid N45 cardinal for conveyance and disappeared

Earlier, Legit.ng reported that a Nigerian antheral who deals successful cars said idiosyncratic came to his store and paid N45 million for a car but did not instrumentality it

According to Uchenna Odu, the car paid for by the lawsuit has been with his dealership for 2 years.

He said his institution has tried calling the antheral and besides reached retired to his bank, but they person not seen him since then

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Source: Legit.ng