From the last days of 1401, domestic news about the plan to import used cars saturated the atmosphere of the society. This plan was first proposed in the form of the 1402 budget, but after some time, the news of its elimination came. Once again, at the beginning of 1402, it was announced that the import of cars does not need a new approval and the Ministry of Security can do this. Finally, this plan was approved by the Parliament, but its review in the Guardian Council was not successful. Finally, this news-making project returned to the parliament to be reviewed once again.
The biggest obstacle to the implementation of the plan to import used cars is the issue of supporting domestic industries. Opponents of this plan insist that the import of used cars will end up at the expense of domestic car manufacturers and will reduce their sales. Therefore, we expect strict rules to support domestic producers to be included in the final review of the plan. One of these possible proposals is scrapping used cars in exchange for importing foreign used cars.
Similar experience
About two years ago, the plan to import heavy used cars with a life of less than five years was implemented. This plan was implemented due to domestic demand and lack of ability to renew heavy worn out vehicles. According to this plan, in exchange for the import of each heavy vehicle with a life of less than five years, one used heavy vehicle must be scrapped.
The scrapping cost of each used truck is about 1.5 billion tomans, which imposes a significant financial burden on the importer. After European used car importers objected to this plan, now a new resolution has been approved by the parliament for the import of used trucks and tractors. According to this resolution, in the absence of a sufficient scrapping certificate, importers can pay five percent of the price of the used truck as a replacement and receive a national license plate for their car.
It is expected that such a procedure will be adopted for the import of light used cars. This program will be tied to the scrapping of light used cars, and applicants will need to provide a certificate of scrapping of used cars to number their cars. After some time and due to the reduction of scrapping certificates, we will see an increase in the price of used cars or scrapping certificates. As a result, the import law will also change and the applicants will be able to clear the car by providing an amount of the car price.
Of course, the import tariff for used cars has not been determined yet. Currently, the import tariff for zero kilometer cars with an engine volume of less than 1.5 liters is equivalent to 55% and above 1.5 liters is equivalent to 75% of the car price. The customs fee for importing heavy second-hand cars is 1.5%, but in the case of light cars, we will expect a higher tariff.
What will be the price range of used cars?
The possible source of import of used cars to Iran will be the Persian Gulf countries and other neighboring countries. We expect the United Arab Emirates, Oman and Iraq to be the main sources of used car imports to the country. For this purpose, we will have a look at the car market in Sulaymaniyah, Iraq, to see at what price used cars with a lifespan of less than five years can be purchased. The free market dollar rate at the time of writing this article is about 52 thousand tomans. The cars in the table below are among the popular cars in the Iranian market.
| car | price in dollars | Price in Tomans | The price with the calculation of duties similar to used heavy cars |
| Toyota Yaris 2019 | 16200 | 843 million tomans | 927 million tomans |
| Kia Cerato 2021 | 17800 | 926 million tomans | One billion and 18 million tomans |
| Toyota Camry 2019 | 27000 | One billion and 400 million tomans | One billion and 540 million tomans |
| Toyota Land Cruiser 2022 | 90,000 | Four billion and 700 million tomans | Five billion and 150 million tomans |
| BMW five series 2020 | 42500 | Two billion and 210 million tomans | Two billion and 430 million tomans |
| Hyundai Santa Fe 2021 | 31000 | One billion and 612 million tomans | One billion and 773 million tomans |
Of course, these prices do not include the cost of numbering, license plate issuance, fuel card and other taxes. However, the price of Hyundai Santa Fe 2021 will not reach three billion tomans if the tolls are priced correctly. If this plan can pass the Guardian Council’s filter and reach the implementation stage, we will see positive changes in the market of imported cars as well as assembled Chinese cars. However, the impact of the plan to import used cars on the domestic car market is weaker, because these cars will not compete with domestic products in terms of price. Therefore, there will still be a price gap between the market and the factory, although this gap will decrease compared to the current situation.
