Cuba allows auto sales, but high prices turn away Cubans

Article by Anita Panait, on January 6, 2014

For the first time since 1959, Cubans are now allowed to purchase vehicles without getting permission from the government. Starting January 3, 2014, Cuba is allowing sales of vehicles – either new or second-hand – from state retailers sans government authorization, thanks to reform that was initiated in September 2011.

Before that, only vehicles that were in Cuba before the 1959 revolution could be freely purchased and sold --  the main reason why 1950s or older cars, most of them American-made, are cruising on Cuban streets. Vintage American cars were joined by Soviet-made cars, which are dated from the time when the Soviet Union was still Cuba’s biggest ally and benefactor.

Newer vehicle models are usually found in government hands and were sold used before January 3, 2014 at a relatively low price to chosen persons like Cuban diplomats, doctors and teachers who served abroad.

Now everyone in the country can buy vehicles freely, but for a high price, literally. Vehicles being sold have markups of 400 percent or more, thus quickly shattering hopes for many Cubans.

For instance, a state-run Peugeot dealership in Havana sells a 2013 model 206 for $91,000 and a 2013 model 508 for $262,000.  Roberto Gonzales, a state driver, told Reuters that with his monthly income of CUP600 per month (around $30), he could never buy one of those vehicles. “I am going to die before I can buy a new car." The average monthly wage in Cuba is $20. [source: Reuters]

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