In Cuba, A Used Car Is No Bargain
News > Economy
Nick Miroff
Monday, October 31, 2011 at 3:16 PM
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A man checks his car in Havana. In October, Cuba legalized the sale and purchase of automobiles for all citizens. Now, Cubans who leave the island permanently can transfer ownership of their car to a relative or sell it outright. Previously, Cuba could seize the vehicles of those who emigrated.
A man checks his car in Havana. In October, Cuba legalized the sale and purchase of automobiles for all citizens. Now, Cubans who leave the island permanently can transfer ownership of their car to a relative or sell it outright. Previously, Cuba could seize the vehicles of those who emigrated.
Javier Galeano | AP

Cuba's Communist government is now allowing people to buy and sell cars, but there are still restrictions on auto imports. Few new cars enter the market. So, with demand high and supply low, cars already on the island are selling for astronomical prices.

What may be the most expensive Honda Civic in the world can be found in Havana. There's nothing especially luxurious about the car: It's a red 2005 model, with 60,000 miles on the odometer.

But what is special about this Civic is that there are few like it on the supply side of Cuba's used car market. And that's why Acela Claro says she's had plenty of interest, even though she's offering it for $65,000.

"I've been getting calls and emails from as far away as Madrid," Claro says. She adds that the inquiries are coming from Cubans as well as foreigners on the island who want a newer car.

Until a few weeks ago, there was no way to legally transfer ownership of a vehicle like this. The only cars that could be freely bought and sold were those built before 1959, when Fidel Castro came to power. That's why there are still nearly 60,000 classic cars on Cuba's streets, but few late-model Hondas. Bringing in a new car requires special government permission and a 100 percent import tax, but Claro still says the U.S. embargo is the reason she's asking so much.

"Our country is so blockaded that we can't just bring in anything we want," Claro says. "That's why a car like this doesn't cost the same as it would [in the United States]."

The Cuban government has long treated car ownership as a privilege and a reward, not a right. Doctors, military officers and exemplary workers got the chance to buy one from the state, often at subsidized prices.

But since Cubans couldn't legally sell their vehicles, they learned to do everything possible to keep them on the road.

Nelson Ramos, a car enthusiast and former economist in Havana, says cars in Cuba are "like members of the family."

"Cars stay in the family forever. And you take care of the car, you fix the engine, and we probably have the best mechanics in the world," Ramos says. "This is probably the only country in the world where you don't have a junkyard for cars. We simply get the wreckage and put it on wheels and drive it again."

There's always been a black market for used cars in Cuba, and even now, the best way to find vehicles is though illegal brokers or by going online.

Over slow dial-up Internet connections, Cubans who know how get around government censors can shop on Craigslist-style classified sites like Revolico or Cubisima. The prices are stunning. A 2006 Hyundai Accent is priced at $40,000. A 1993 Volkswagen Jetta, $20,000. In a country where the average wage is still around $20 a month, only Cubans with relatives abroad or lucrative private businesses can pay such a fortune. But they do.

Waiting for passengers outside the Havana bus terminal, cab driver Pedro Cantero shows off the green Russian Lada his father was allowed to purchase in 1980 as a reward for cutting so much sugar cane. Cantero says the battered sedan is still worth nearly $10,000 today in Cuba, even more than when it first rolled off the Soviet assembly line.

"We're happy about the new change, because it removes an unnecessary restriction," Cantero says. "I'm going to take better care of the car knowing I can sell it if I need to." But before any car owners in the U.S. start calculating what their used vehicles might sell for in Cuba, they should keep in mind that between the U.S. embargo and Cuba's own restrictions, neither government would allow it. [Copyright 2011 National Public Radio]



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