Toto

E-Mail Article

Printer-Friendly

Translate

Share Article

Text Size

(MENAFN - AFP) With the world's largest oil reserves and the cheapest gas anywhere, you'd think Venezuela is a driver's paradise. Wrong. New cars are scarce and sellers of used ones -- even clunkers -- make a killing.

The counter-intuitive economics stem from rules imposed in 2003 by populist President Hugo Chavez that make it difficult for businesses to obtain hard currency and thus wildly expensive to import new cars and spare parts.

So demand for second-hand vehicles is huge, and they are even used as investments -- a hedge against inflation so voracious it makes no sense to park money in a bank account.

"Only in Venezuela can the price of used cars go up," said a man who gave his name as Alfredo, as he leaned against a 1995 Ford Lariat he wants to sell at a tidy profit of 8,000 bolivars, or 1,860 dollars, after owning it for three months.

Other great deals, if you're on the selling end of the transaction: a Mitsubishi Lancer purchased second-hand in 2006 for 55,000 bolivars (12,800 at the official exchange rate) now goes this for nearly twice as much.

A 2002 Mercedes 320 SLK, purchased in 2008 for 180,000 bolivars, has appreciated in value 55 percent.

No matter the model, year or number of previous owners, the price always goes up.

For years now, prospective car buyers who go to auto dealerships find the lots empty or almost empty. Waiting lists to buy such vehicles are endless.

Venezuela has a population of nearly 30 million people, but only about 121,000 new cars were sold last year, a drop of 8.2 percent from 2010, according to the Automotive Chamber, an industry group.

Economist Jesus Casique explains that the Chavez government makes it virtually impossible to acquire dollars at the official exchange rate of 4.3 bolivars to the greenback.

So business people have to buy them at the higher black market rate. In Venezuela,...