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Cuba New Car Sales Hampered by High Prices

Motor Trend logo Motor Trend 1/5/2014 Edward A. Sanchez

Purchasing a new or used car is a common, relatively painless transaction that happens thousands of times a day in the United States, enabled by Internet sites such as Craigslist, AutoTrader, or simply walking into a showroom and negotiating a deal. A higher-mileage older used car can be purchased in the low thousands, or even under $1000 for more well-worn examples.

Cuba New Car Sales 2014© Provided by MotorTrend Cuba New Car Sales 2014

For more than five decades, the only way to purchase a new or used car in Cuba was with special government permission. As of the first of the year, special permission is no longer required to buy a new car in Cuba. But astronomical prices listed by the government-owned dealerships discouraged most potential shoppers from considering a purchase. In examples given in a Reuters report, a Peugeot 206 hatchback, which goes for the equivalent of approximately $14,000 in Mexico, was offered for $91,000, and the upscale 508 sedan, which sells for $31,300 in Mexico, was on-sale for $262,000.

The average monthly wage in Cuba is only $20, putting the price of new cars well out of reach of the average citizen. Even late-model used cars are priced outrageously, with a 2005 Renault going for $25,000, available in most other markets for around $3000.

Cuba New Car Sales Hampered by High Prices

The government promises profits from the sale of new cars would go to public transportation improvements in the country. But with prices for even used cars going for nearly 100 times that of the average yearly wage, expect sales volumes for new and late-model cars to remain modest.

Source: Reuters

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