On a recent sunny afternoon in Lagos, law student Promise Okwuchukwu saw a black Honda Accord sedan parked at an auto mechanic shop in the Ebute-Metta neighbourhood. Tacked to the windscreen and scrawled over a piece of white paper was the phrase "BUY ME" and a phone number.
Okwuchukwu immediately phoned the seller, assured him of getting him a buyer within a few hours and then proceeded to log onto Cars45.com, where he booked an appointment for inspection.
"Everything was completed within two hours," he says happily, referring to Cars45's entire process of inspecting the car, agreeing a price and transferring the electronic payment to the car owner's bank account. Okwuchukwu received a commission from the grateful car owner for his effort.
This is how Cars45, a Nigerian automotive trading startup which launched operations in 2016, wants the used-car-buying market to be: organised, fast, transparent and hassle-free.
The traditional purchase process--where a seller would wait for weeks to find a buyer and contend with haggling--can be exhausting. Sellers of used cars have to drop their vehicles with an auto repair shop to find a buyer, or list their cars on online trading websites and social media.
Started in 2016 by Etop Ikpe, the former commercial director of Nigerian e-commerce firm Konga, and other entrepreneurs, Cars45 uses its digital platform to improve the buying, selling and swapping of used cars. A prospective seller visits the website, fills out an evaluation form with details of the brand, model, gear type, and year of manufacture, and receives a quote based on current market value. The seller takes the vehicle to Cars45's inspection centres, where auto experts examine its condition. A price is agreed and payment made within an hour.
Buyers then visit the retailer's sites to purchase the new and pre-owned cars or trade in their vehicles.
Second-hand market expands
The second-hand car market is believed to have reached about $60-$70bn in global sales, according to a United Nations Environment Programme 2018 report. The market is driving vehicle ownership in Africa, where demand for used cars remains popular, primarily due to affordability.
A 2016 report by Deloitte found that the relatively well-developed markets of South Africa, Egypt, Algeria and Morocco accounted for 80% of the continent's new car sales. In Nigeria, where the motorisation rate is approximately one third of the global rate, representing huge possibilities for...