Cubans and New Cars

For the first time in 50 years it is now fashionable and legal to own a new or near new car in communist Cuba, legalising the sales and purchases of automobiles for all citizens at the end of last year, as part of the communist run island’s economic transformation.

Sales have been on hold until the government announced law was published this month, under the law which took effect on October the first, buyers and sellers must each pay a 4% tax and buyers must declare that the money used for the purchase was obtained legally.

On Cuba’s streets you can find huge numbers of original American cars from the 1950s, mostly in a state of disrepair, unrestricted sales had previously been limited to cars built before the 1959 revolution.

Cubans travelling abroad were allowed to bring cars back or buy a Russian Lada, Moskvich or Volga from the state, some senior workers were given company cars, fuel was strictly monitored to make sure the cars were driven strictly for work reasons. As the law legalises the ownership of more than one car, the new law will allow the sale of cars from all models and years, in these cases the sale and purchase tax rates will be raised accordingly.

Accompanying the law change will be a 40 page guide book for Cubans who emigrate, they can transfer ownership of their car to a relative or sell it , previously, the state could seize the automobiles. While most car sales have been illegal without government permission since the early 1960s, used automobiles have been widely traded in a booming black market for years, buyers would pay large amounts of cash under handshake agreements, with the title not changing hands.

This will mean once the new regulations take effect, generations of cars removed from the original title holder would need to be untangled. While under the new law it is not clear how many Cubans will be able to take full advantage, many islanders only make $30 a month, although relatives overseas are paying an important role in household economies, a small number of succesful new business owners may be able to convert their profits into a new set of wheels.

Cuban President, announced a series of free market reforms designed to rescue the island from economic ruin, some private enterprise, and plans to legalise the sale and purchase of real estate.

An old American car breaks down at the wall of Maleco in Havana, Cuba.

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