A Taste of Car Shopping in Ethiopia - kinda sour, huh?

“A Taste of Car Shopping in Ethiopia - kinda sour, huh?”

 

Have you bought a used car lately? Then you may know that it’s dangerous to get your heart set on something that might fall through. Well, that happened a little bit with us this past week as we received some good and bad news concerning a 1988 Toyota Land Cruiser we had looked at. Let’s start by building your love for this vehicle as well. First of all, it is old (22 years to be exact!), but it only has 250,000 kilometers (which isn’t very much here) and 80% of that driving was in Germany (ie. paved roads!). Plus, before it was imported to Ethiopia 3 years ago, it had an engine overhaul (the fact that this was done in Germany and not Ethiopia is a HUGE plus!). I had two good mechanic guys look at it and they both agreed that the vehicle itself is in GREAT shape. The most important part is the frame. If it is or has ever been cracked and welded back together, that is a HUGE red flag as the welded spots break easily on Ethiopian roads. The frame looks very strong and the undercarriage shows that the vehicle has seen very little (if any) off-road usage. That’s a plus! Then there’s the engine. It needs a little bit of work as there is an oil leak, but that is fixable. It has a model L engine, which apparently is one of the best for Land Cruisers. Another plus! Finally, Toyota is by far the best brand to buy in Ethiopia since their parts are cheapest and easily accessible (Nissan’s are VERY expensive, and anything American would be a nightmare!).  So anyway, the only strike against this vehicle was its age and both of my mechanic friends agreed that if we can get this vehicle for under $20,000, it’s worth it!

 

Now, some of you know about import duty (tax) in this county. Since vehicles are only owned by the richest of society, an astronomical import duty is placed on vehicles, I guess, as a way to tax the rich. Every type of vehicle has a certain percentage of the original invoice price that must be paid upon entry. For example, a church in Germany surprised a co-worker here buying a brand new $40,000 Land Cruiser and shipping it to Ethiopia (how about that for a Christmas present?). Upon arrival, our friend got a surprise letter saying, “You can pick up your Land Cruiser after you pay us $100,000.” You see, at that time, the duty on a new Land Cruiser was 250% of the original invoice price so a $40,000, times 2.5, equals $100,000 on top of the forty grand that the German church already had paid (since this time, the duty percentage on Land Cruisers has risen to 330%, pretty fun huh?). Needless to say, our friend did not have the money, but he was able to “sell” the rights to the car to someone who had “duty free status” (a privilege given by the government to some organizations and projects – ours not included!).

 

Ok, so back to the 1988 Land Cruiser. If a car is brought into the country by a person who has “duty free status” and is then sold to someone without such privilege, the new buyer must pay the duty. BUT…every year that the car is in the country the duty goes down by 10% so that after 10 years, there is no duty left to pay. So ideally, we would like to find a 1999 car that was imported NEW, ten years ago. This 1988 vehicle has only been in the country 3 years, so it has 70% of the duty left to pay. However, without knowing the original duty owed, we couldn’t figure out how much remained. The seller was asking 6000 Euro which is about $9000, so we figured if the remaining duty was less than $11,000 we would jump at buying it! However, another complication was involved. The seller had promised someone else first dibs. If the first deal fell through, we were next in line.

 

SO…., after all that background, this week we received a text message that said that “the car has not been sold” at which our hearts skipped a beat! The next line however caused our hope to go into full cardiac arrest – “the duty owed is 195,000 birr,” which translates to $15,750! That won’t include the 2% sales tax and registration fees that will follow. So, just as quickly as our excitement rose, our disappointment hit, knowing that the car would end up being over $25,000, which it’s not really worth it (even here). It’s not that we can’t cover the extra (so don’t surprise us by raising the rest on our behalf!), it’s just that we would be paying too much for what we’d get.  So the search continues. As a general rule, vehicles over here are frustrating, but hey, that’s just life!  We share it not as a complaint, but rather to let you into our world with regard to something so similar yet totally foreign to the life we knew back at home. Next time you glance at the sticker prices in a used car lot, think of us and shoot up a prayer that the Lord will provide adequate transportation for HIS work to be done.