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At 29, Tade Ogundiran, an analyst at a mid-sized investment bank in Lagos, dreams of owning his first car. After five years of ride-hailing apps, sweaty danfo rides, and missed meetings due to late drivers, he sees car ownership as both a lifestyle upgrade and a career necessity.
But for professionals like Ogundiran, that aspiration is bumping against a harsh economic reality.
A new report by Cowrywise titled “The Economics of Owning a Car” reveals that owning a modest Nigerian-used car like a 2005 Toyota Corolla now costs an estimated N22.7 million over five years in Lagos. That includes purchase, fuel, maintenance, regulatory fees, repairs, and depreciation. Even after factoring in resale value, the total cost still stands at N18.9 million.
To manage this without financial strain, Cowrywise estimates that your transport budget should not exceed 10 to 15 percent of your net monthly income, following the 50/30/20 rule.
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This means Ogundiran would need to earn at least N1.2 million to N1.5 million net per month to comfortably own and maintain a car, an income typically earned by assistant managers in commercial banks or senior associates in investment firms.
“For young professionals in Lagos, owning a car has become more of a financial strain than a symbol of progress,” Cowrywise said.
For context, Ogundiran earns around N700,000 monthly. If he opts to save for a car over two years, he’d need to set aside N217,000 per month, nearly 31 percent of his income.
Taking a loan isn’t much easier. A hybrid of staff and digital loans would mean monthly repayments of N575,000, pushing his entire budget to the edge.
“It’s like the system is designed to make car ownership a privilege, not a milestone,” he says, surfing the internet to check out companies with car mortgaging systems.
Even if the investment analyst manages to get his desired car, there is also the challenge of fuel consumption. Based on Cowrywise’s estimate, the average fuel consumption is at 8L/100km in free-flow and 12L/100km in traffic. It becomes 8L/100km (no traffic), and 18L/100km (traffic) when Nigerian vehicles, road conditions, and other factors are considered.
The Nigerian National Petroleum Company Limited (NNPCL) raised the price of PMS to N915 in Lagos and Abuja on Monday, a 5.17 percent increase from the N870 per litre it sold back in March. That means on average, the Nigerian car consumes 15L/100km, costing the owner N13,725.
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Alternatives aren’t cheap either. Relying on ride-hailing for daily commuting costs N461,000 monthly, or N5.5 million annually, according to the report, higher than car ownership over time.
Public transport remains the most affordable at just N1.4 million annually, but it comes with trade-offs: long delays, safety risks, and unpredictability.
Cowrywise findings underscore a deepening squeeze on Nigeria’s urban middle class, which now faces hard choices between comfort, cost, and career productivity. With wage growth lagging well behind inflation, mobility — once a driver of social and economic advancement — is now an economic chokehold.
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With the naira’s sharp depreciation and inflation still sky-high, even used car prices have surged, ironically appreciating in replacement value due to rising import costs. A car bought for N4.9 million today may cost N6.9 million in three years, the report notes.
For Ogundiran and thousands like him, mobility in Lagos is no longer about convenience. It’s about survival, planning, and sacrifice.
Until salaries catch up with the cost of living, the car dream may remain parked.
