Cuba Legalizes Sale Of New Cars, But Many Cubans Think Prices ‘Crazy’

Reuters reported on Friday that a new Cuban law which legalized the buying of new and used cars from the state without special authorization -- a landmark in a country where until two years ago, only those bought before 1959 could be legally traded -- passed into validity. But in Havana on Friday morning, some Cubans were registering their disgust with the prices of both new and used vehicles being sold at state-run dealerships, while others wondered how the 80 percent of Cubans who work for the state (and collect the $20 average monthly wage) could afford them.

Markup on the newly available cars is reaching 400 percent. South Africa’s IOL Motors reports that a new Kia Rio hatchback, which goes for under $14,000 in the US, is being priced at $42,000 in Havana. The site wrote that at a used-car dealership in western Havana, the cheapest vehicle -- a 1997 BMW which was the first to sell -- went for $14,457. The BBC’s correspondent in Havana reported that many Cubans browsing one used-car store in the upscale neighborhood of Miramar were calling it “madness” and “a lack of respect,” with one woman telling the BBC, "The prices are crazy. No Cuban who works for the state can buy at that price. They have zero chance of getting a car."

Since September 2011, Cubans can sell used cars to private individuals -- before that, only pre-1959 “yank tanks” and their Soviet counterparts could be legally traded, which is why so many still ply the streets of Cuban cities. But to buy a new or used one from the state-run dealerships, which own half of the island’s vehicles, residents had to get special permission from the transportation ministry. Long wait times on that permission created a black market for car buyers who would flip them. Now, Cubans don’t need that permit, but only the government can import vehicles -- and decide how much they’ll be sold for.