2014: Cubans Now Free to Buy New Cars at Exorbitant Prices

January 3, 2014 - 3:29 PM

2014: Cubans Now Free to Buy New Cars, at Exorbitant Prices

A Cuban transports a new refrigerator in the trunk of an old car. (AP)

(CNSNews.com) -- Fifty-five years after the Communist takeover in Cuba, residents there can now buy new and used cars without a government permit, but with the massive mark-up on new car prices by state-run retailers, most ordinary Cubans won’t benefit from the new rules, reported BBC News.

A new Peugeot 508 model, for example, is selling for $262,000 in Havana at a dealership, and even used VW's are selling for more than $60,000.

Since 1959, Cubans could only freely purchase autos made prior to that year. To buy a newer used or even a brand-new car required a state-issued permit, which authorities usually only allotted to VIPs, such as athletes, and those deemed vital to the Marxist regime, such as doctors.

Cuban dictator Raul Castro, brother of Fidel Castro, is permitting new regulations that allow Cubans to buy cars without the government permit, effective Jan. 3, 2014. But as BBC and other outlets report, the car dealerships are still state-controlled and the prices are marked up substantially.

Cuban car retailers are marking up the price of new cars by 400% or more, said the BBC, which also found that used cars were selling at astronomical sums.

A new Peugeot 508, for example, is selling at a retailer showroom in Havana for $262,000.  The suggested retail price in England is 22,000 pounds, or about $30,000 in the United States.

At the state-run Peugeot dealership in Havana prices range “from $91,000 for a 2013 model 206 to $262,000 for a 508,” with people walking “away shaking their heads in disgust,” reported Reuters.

“‘I earn 600 Cuban pesos per month. That means in my whole life I can't buy one of these. I am going to die before I can buy a new car,’ Roberto Gonzales, a state driver, said, walking back to his 1950s Plymouth.”

The Havana Times listed prices of new cars and used cars.  Some of these include the following:

 

NEW

Peugeot 206   $91,113

Peugeot Expert Tepee   $212,940

 

NEWER

2011 Hyundai Accent   $45,000

2010 VW Jetta   $51,000

2011   KIA Rio   $42,000

 

USED

2000 Audi A4   $45,000

2009 Jeep Hyundai Santa Fe   $90,000

2009 Hyundai Sonata   $60,000

2010 VW Passat   $67,500

 

Seventy-two percent of Cubans work for the government, and the average Cuban makes the equivalent of about $22 a month, reported the Havana Times.

peugeot

Peugeot 508 sedan, the 2012 model. This model, for 2013, is selling for $262,000 in Havana, Cuba. (AP)

Cesar Perez, an artist interviewed by Reuters, said, “These prices show a lack of respect for all Cubans. What is here are wrecks. I now have no hope of getting a car for my family.” He was looking at a 2005 Renault on sale for the equivalent of “$25,000 and available outside the country on the Internet for $3,000.”

“A teacher looked at the price list and yelled ‘Are there any bicycles?’ as she stomped away without giving her name,” Reuters reported. The Cuban government has announced that it will use profits raised from this change in the law to fund public transportation and the sale of “affordable bicycles,” according to the Havana Times.

According to reports in the Havana Times, a large Chinese auto manufacturer is preparing to set up an assembly plant in Cuba. Despite the reforms, Cubans are still not allowed to import cars.

Nine out of ten Cubans do not own a car. Cuba has a famous collection of classic cars – an estimated 60,000 dating from before the Communist revolution.