Courtesy of autoblog.org
Cuba. A beautiful, mystical and almost mythical place. Sitting just a mere 90 miles away from Florida’s Key West, the average American doesn’t know all that much about Cuba. From the picture above (recently taken), it looks like Cuba is stuck in some sort of a time warp. This traces back to the 1950s political turmoil and subsequent ban on the importing of new cars into the country. (I’m sure Cuba’s relationship with the US didn’t help.) Now let’s not worry about the political details here…we are here to talk about cars, right?!
Cubans have done a tremendous job of keeping these 1950’s era vehicles running in good condition. On one hand they are blessed with great weather that generally cooperates with the characteristics of steel. But moving parts fail eventually, and these people have done a great job of getting back on the road after a breakdown.
So let’s fast forward Cuban economic policy about 60 years. 2014 marked the beginning of a new era in automobile ownership in Cuba. The import laws have been relaxed and new cars were immediately made available to the Cuban auto market. You may then ask the question, “why are they driving such old cars if new cars are now available?”
The cars are available, but the demand curve is almost flat. The economy cannot yet support the sale of new and slightly used cars. Why? Because the general population cannot afford to pay for these types of vehicles. The average Cuban makes a couple dollars a day. It would take 40 years to save up enough money for a new or slightly used car. Additionally, cars cost either the same as the US or are ridiculously more expensive than a comparable car in the US.
Price gouging is an unfortunate reality that sometimes happens when a new market opens up. Think about how much a personal computer was when it was first introduced. $2000+ for a PC meant that only the wealthiest of consumers could afford one. A similar economic phenomenon is in place here where the new automobile is not yet available for the masses.
Lucky for (almost) all of us because we don’t have to worry about these economic issues! Ok I’m not trying to minimize the fact that the US economy is nowhere close to perfect. But after learning that Cubans make $20/month on average, I realize that our earnings are far more in line with car buying than that of the Cuban people. A median income household can access a car in a fraction of the time it will take a Cuban citizen in their current economic climate. Couple this with a competitive used car market and the American people are the big winners! Why? Take a look at a couple of these awesome used cars and then try to debate me…
2013 Mercedes-Benz SLK250
See more about this car here
This SLK250 is barely a year old, and with only 18,000 miles. It is available here for just over $37,000, which is $6000 less than the original selling price!! Luck for you if you are in the US, because you would never be able to pull off a price like this in Cuba (or at any other dealer!)
2012 Mazda 6
See more about this car here
This second generation Mazda 6 was more solid than the original generation, but flew under the radar. This means tremendous value for you. This particular car has only 62,000 miles, looks pristine and costs only $11,000. You can scoop up one of these in no time, and with discounts, Rent2Buy and financing available, you’re sure to one up the Cubans at this car buying game!