If you own a car in Nigeria, or you are planning to buy one this year, there is a new line item to look out for: Proposed Vehicle recycling fee. The National Automotive Design and Development Council (NADDC) has said that a one-time mandatory fee on vehicle registration will help finance a national end-of-life vehicle (ELV) programme. Here’s what was actually announced, what wasn’t and how it could affect the cost of buying and keeping a car in Nigeria.
What is the vehicle recycling fee?
The federal government plans to introduce a mandatory, one-time recycling fee starting in 2026, according to a December 2025 report cited by the NADDC. The idea is simple: buyers contribute a small amount when a vehicle is registered, and that money pays for the environmentally safe disposal and recycling of the vehicle when it finally ends its useful life.
NADDC director-general Joseph Osanipin described the model as one used in developed economies, where disposal is undertaken when a vehicle is no longer roadworthy. He called the allegation “modest” and acknowledged that the public might resist it at first.
NADDC will achieve what it says
- Revenue: NADDC projects more than ₦150 billion annually from 2026 once the end-of-life vehicle program is fully operational.
- Clean roads: Less abandoned roadside debris, and less oil, metal and battery pollution.
- Job: Dismantling, refurbishing, logistics and resale of components are thousands of jobs.
- Reuse: NADDC research shows that more than 85% of end-of-life vehicle components can be reused or recycled.
A previous July 2025 report on end-of-life vehicle regulations cited even bigger figures, including potential recycling-fee revenue of over ₦100 billion, at least 40,000 direct and indirect jobs and more than one million used batteries and two million used tires recycled annually. Consider these official estimates rather than confirmed results.
How much would you pay?
This is the question everyone asks and the honest answer is: No official vehicle volumes were disclosed in the report we reviewed. NADDC only called the fee “modest”. Until a gazetted schedule or an official circular appears, any specific Naira image you see on social media should be treated as speculation.
What we know about the structure:
- It is described as one timeNot annual like car license renewal.
- It is collected at registrationHence it will probably appear in the cost of registration of a newly purchased or newly imported vehicle.
- It’s meant to fund disposals at the end of the car’s life, so it’s a contribution rather than a penalty.
Who can feel it the most?
The Nigerian market is dominated by used imports. Citing National Bureau of Statistics data, reports cited imports of passenger cars at about ₦1.01 trillion in the first nine months of 2025, up from about 894 billion a year earlier. A recent report describes a further increase in car imports to 2026. To this extent, Tokunbo will be the segment where a registration-linked fee will touch the most buyers
Practically, this means:
- Tokunbo buyers May see an additional charge on top of import duties, clearing costs and registration. If you’ve already budgeted for tokunbo import costs, add a buffer for this.
- Buyers of new and Nigerian-assembled cars Also pay at the time of registration if the fee is applicable across the board, as the description “at registration” suggests.
- Dealers and Importers Will probably pass the cost on to the final price.
Rules for importing used vehicles are also getting stricter
Recycling fees are not coming alone. Reports in late 2025 also point to mandatory pre-export certification for used vehicle imports from 2026, with exporters to bear the cost, and an auto industry bill planned to go before the National Assembly. The larger goal is to curb imports of very old, end-of-life vehicles and push the market toward newer, cleaner vehicles.
For buyers, the potential side is clear, although details are still being worked out: older and cheaper imports may be harder to come by, and the documented, newer end of the market may be more expensive but safer.
What will happen to older vehicles under the program?
The concept of NADDC is that owners hand over vehicles that have reached the end of their life instead of dumping them. Cars will be dismantled, refurbished where possible and resold for parts. This creates a market Nigerians already know well: “Belgian parts” traded in places like Ladipo in Lagos. The difference will be a formal, regulated chain for collection and dismantling of oil, batteries and tires with environmental standards.
A December 2025 opinion column argued that the fee was a good idea but recommended a pilot phase before a full rollout, citing enforcement as the main challenge. This is a legitimate concern in a market where informal transactions are common.
Advantages and disadvantages for car owners
Potential benefits
- A legal way to dispose of a dead car instead of towing it or leaving it on the road.
- Potential growth in spare parts and recycling economy, job creation.
- Less abandoned vehicles block roads and drains.
Possible defects
- One more cost at a time when clearing charges, FX swings and fuel prices already weigh on buyers Compare running costs with our fuel consumption per km guide.
- No published amount yet, which makes budgeting difficult.
- Enforcement and transparency risks: Who collects the money and how is it used?
How to prepare before buying
- Ask the dealer or clearing agent in writing Whether any recycling or ELV charges apply to the vehicle you are buying and who is responsible for paying it.
- Keep a registration buffer. Set aside extra money beyond your estimated registration costs until official figures are released.
- Check the official channel Like NADDC and Nigeria Customs Service for circulars before paying any “recycling fee” to any person. Don’t pay someone claiming to collect it informally.
- Choose registered vehicles. With pre-export certification and stricter import scrutiny, clean paperwork will be even more important for resale value.
- Review your insurance and financing. If you are using a car loan, check whether the new registration can be charged. See our car insurance guide for other mandatory costs.
Frequently Asked Questions
Are vehicle recycling fees already in force?
It was announced to begin in 2026, and the NADDC said it is authorized to implement an end-of-life vehicle program. However, the reviewed reports do not give a confirmed start date or a gazetted fee schedule, so confirm current status with NADDC before assuming this applies to your registration.
Will I pay it every year?
no It is described as a one-time fee paid at the time of registration.
Does this apply to new cars or only Tokunbo?
Reports generally describe a fee for vehicle registration, although a commentary specifically mentions imported used vehicles. Details about the scope are still emerging.
Will it increase the price of the car?
Probably a little, since dealers tend to bear registration-related costs, but the size depends on a figure that hasn’t been released.
take root
Nigeria’s proposed vehicle recycling fee is a one-time, registration-linked charge to fund end-of-life vehicle disposal, NADDC projects at over ₦150 billion annually. No official amount is disclosed, so budget a buffer, check with official sources and avoid paying anyone unofficially.
Disclaimer: Vehicle prices, import duties, fees and specifications in Nigeria change frequently. Always check current figures with dealer or official source (NADDC, Nigeria Customs Service) before buying. This article reflects reports available at the time of writing, including statements attributed to NADDC in December 2025.
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