Saturday, December 28, 2013

Cuba - A classic car buyer's paradise in 2014?

Cuba: A classic car buyer's paradise in 2014?
Rules are easing on buying and selling the old American cars that still
line Havana's streets.
Fri, Dec 27 2013 at 1:47 PM

This '57 Chevy looks pristine, but the economic embargo means that many
parts are improvised--or replaced with Russian alternatives. (Flickr/LA
It's no surprise that Cuba, aside from having free state health care, is
a haven for old American cars. The streets are lined with classics of
the fin era ending in 1959, an estimated 60,000 of them, and you're more
likely to see a '58 Eldorado or a '56 Dodge Custom Royal Lancer than a
modern Russian car. But the rules that kept those old Yank tanks on the
road—often, due to the economic embargo, with Soviet-era engines and
hand-made parts — are changing, and the big beneficiary could be the
American classic car buyer.

Since 1959, new cars — hugely expensive — were sold only at
state-approved dealerships, and you needed a permit to buy a car, with
preference going to those with connections. People waited many years for
those permits. That, combined with a 100 percent import duty, meant that
even modest newer cars were worth a fortune—how does $65,000 for a 2005
Honda Civic with 60,000 miles sound? Or $40,000 for a seven-year-old
Hyundai Accent?

The artificial barriers also inflated the value of the pre-revolution
American iron — until 2011, the only cars that people could legally buy
and sell without a permit. Even patched-together jalopies from the Big
Three sold for tens of thousands of dollars. For the last two years
Cubans have been able to trade in newer used cars, but the new reform
just announced by the Council of Ministers does away with the permit
process, though the state retailers will remain in place.

There are two possible outcomes of this. The first: business as usual.
People in Cuba don't have a lot of disposable income, so there's not
going to be a big rush of new car buying. And the American cars — still
the cheapest option — will keep their place as treasured family

The second option is that there's so much pent-up demand for new cars
(as there was in the U.S. after World War II) that Cuban consumers will
tighten the belt elsewhere to buy something modern. And that will
dramatically lower the value of the hardly original but rust-free
classics that have largely disappeared elsewhere

Most of the old American cars in Cuba have stayed there for various
reasons, but the government is now making foreign exchange a priority. A
provision of the new law appears to encourage "a marketing entity
foreign or domestic" to buy cars and export them.

How about an exchange — we give them slightly used Civics and Corollas,
and they give us '58 Impalas and '49 Ford Woodys? Let's just say that,
given all the shade-tree repairs, these cars will be challenging
restorations — despite the rust-free sheet metal. But what a story you
could tell! It's almost as cool as smoking a Cuban cigar smuggled out
via pigeon.

Source: Cuba: A classic car buyer's paradise in 2014? | MNN - Mother
Nature Network -

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