• The Federal Government has officially cut vehicle import duties, new cars from 20 to 10 per cent and used "tokunbo" cars from 15 to 5 per cent
• Here are seven car categories that are expected to get cheaper this month, but dealers say don't expect discounts overnight
• Industry insiders warned that the exchange rate is still the major factor controlling car prices in Nigeria

The Federal Government has officially slashed car import duties, new vehicles now attract 10 per cent instead of 20 per cent, and tokunbo cars have dropped from 15 per cent to 5 per cent.

The move is expected to lower the cost of vehicle imports and provide relief for millions of Nigerians struggling with soaring car prices.

Here are seven cars that should get cheaper this month, and exactly why your dealer might not change the prices yet

The Nigeria Customs Service confirmed that the new duty took effect on July 1, 2026, as part of the government's fiscal policy measures aimed at reducing the cost of vehicle importation, easing the burden on importers, and making vehicles more affordable for consumers.

In April, the federal government had cut import tariffs on fully-built passenger vehicles, four-wheel drive cars, and station wagons from 70 percent to 40 percent, as part of the new 2026 Fiscal Policy Measures.

So on paper, cars should be getting significantly cheaper right now. But there's a new "Green Tax" quietly entering the picture.

The Green Tax surcharge kicked in the same day as the duty cuts, targeting bigger-engine vehicles.

Imported vehicles with an engine size of 2,000 cubic centimetres (cc) to 3,999cc are subject to a two percent levy while vehicles with an engine size of 4,000cc and above are subject to a four percent levy.

Meanwhile, the policy excludes mass transit buses, electric vehicles, and locally manufactured vehicles from this green charge surcharge.

7 cars expected to get cheaper

1. Toyota Corolla (Tokunbo)

The people's car. With used-vehicle duty cut from 15 per cent to 5 per cent, small-engine sedans like this should be among the first to see price movement.

2. Toyota Camry (fairly used)

With the big boy sedan, big relief expected especially since it typically falls under the smaller engine bracket that dodges the Green Tax.

3. Honda Accord ("Discussion continues")

Another tokunbo favourite that should benefit from the 5 per cent used-car duty. Dealers reportedly say Accords move fast once prices even slightly drop.

4. Toyota Hilux

Commercial and personal use combo, the finance minister's team hinted commercial vehicles get the biggest tariff relief. He added that the revised policy could help reduce vehicle prices, especially for commercial vehicles where the tariff adjustment is more significant, provided the Green Tax remains relatively low.

5. Toyota Sienna

The family bus of choice for many Nigerian homes. If it falls in the sub-2,000cc or exempted category, this is one to watch closely.

6. Kia/Hyundai Small Sedans

Budget-conscious buyers might find real relief here since Korean brands often sit in lower engine categories, dodging the green surcharge entirely.

7. Brand-new entry-level cars

With new vehicle duty cut in half, brand-new budget models could see the sharpest theoretical price cuts of all seven on this list.

Why do dealers still hike prices?

Even with duty cuts, industry players aren't jumping to slash prices. The President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, said the Green Tax's unclear structure makes it hard to promise anything yet.

Uncertainty surrounding the exact structure and cost implications of the Green Tax makes it difficult to determine whether consumers will eventually benefit from lower vehicle prices.

In his own words, the real question is what the Green Tax will cost once fully rolled out.

"If it is very little, then the reduction in levies will still be significant and consumers will feel the impact."

Beyond the Green Tax, the naira's exchange rate against the dollar still determines how much dealers pay to clear a car in the first place.

There's also the old Naija market wisdom: prices go up fast, but they come down slow.

Dealers who already stocked cars at the old duty rate have zero incentive to discount stock they paid full price for.

Trump to raise US tariffs on EU cars to 25 per cent over trade deal dispute

Meanwhile, TheRadar earlier reported that the United States President, Donald Trump, had announced plans to raise US tariffs on cars and trucks imported from the European Union to 25 percent, escalating trade tensions with one of Washington’s biggest economic partners.

Trump accused the EU of failing to honour the terms of a previously agreed trade deal reached last summer.

The move marked a sharp increase from the 15 percent tariff ceiling agreed under the 2025 US-EU trade pact, which had lowered duties on European automobiles and auto parts in a bid to ease tensions between both sides.