If you own a car in Nigeria, or you are planning to buy one this year, there is a new line item to watch: the proposed vehicle recycling fee. The National Automotive Design and Development Council (NADDC) has said a one-time, compulsory fee paid at vehicle registration will help fund a national End-of-Life Vehicle (ELV) programme. Here is what has actually been announced, what has not, and how it could affect the cost of buying and keeping a car in Nigeria.
What is the vehicle recycling fee?
According to reports from December 2025 citing the NADDC, the Federal Government plans to introduce a compulsory, one-time recycling fee starting in 2026. 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 eventually reaches the end of its useful life.
NADDC Director-General Joseph Osanipin has described the model as one used in developed economies, where someone has to take responsibility for disposal once a car is no longer roadworthy. He has also called the charge “modest” and acknowledged that the public may resist it at first.
What the NADDC says it will achieve
- Revenue: The NADDC projects more than ₦150 billion a year from 2026 once the End-of-Life Vehicle programme is fully running.
- Cleaner roads: Fewer abandoned wrecks left by the roadside, and less oil, metal and battery contamination.
- Jobs: Thousands of jobs in dismantling, refurbishing, logistics and the resale of components.
- Reuse: NADDC studies reportedly found that over 85% of components from end-of-life vehicles can be reused or recycled.
An earlier July 2025 report on the End-of-Life Vehicle regulation quoted even larger figures, including potential recycling-fee revenue above ₦100 billion, at least 40,000 direct and indirect jobs, and more than one million used batteries and two million used tyres recycled annually. Treat these as official projections rather than guaranteed outcomes.
How much will you pay?
This is the question everyone asks, and the honest answer is: no official per-vehicle amount has been published in the reports we reviewed. The NADDC has only called the fee “modest.” Until a gazetted schedule or an official circular appears, any specific Naira figure you see on social media should be treated as speculation.
What we do know about the structure:
- It is described as one-time, not annual like vehicle licence renewal.
- It is collected at registration, so it will most likely show up in the cost of registering a newly bought or newly imported vehicle.
- It is meant to fund disposal at the end of the vehicle’s life, so it is a contribution rather than a penalty.
Who is likely to feel it most?
Nigeria’s market is dominated by used imports. Reports citing National Bureau of Statistics data put passenger car imports at about ₦1.01 trillion in the first nine months of 2025, up from roughly ₦894 billion a year earlier. More recent reporting on 2026 describes a further surge in vehicle imports. With that much volume, the tokunbo segment will be where a registration-linked fee touches the most buyers.
Practically, that means:
- Tokunbo buyers may see one more charge on top of import duty, clearing costs and registration. If you already budget for tokunbo import costs, add a buffer for this.
- Buyers of new and Nigerian-assembled cars would also pay at registration if the fee applies across the board, as the “at registration” description suggests.
- Dealers and importers will likely pass the cost on in the final price.
Used-vehicle import rules are tightening too
The recycling fee is not arriving alone. Reports from late 2025 also point to mandatory pre-export certification for used vehicle imports from 2026, with exporters bearing the cost, and plans for an Auto Industry Bill to go before the National Assembly. The broader aim is to curb the import of very old, near-end-of-life vehicles and push the market toward newer, cleaner cars.
For buyers, the likely direction is clear even if the details are still moving: older and cheaper imports may get harder to bring in, and the documented, newer end of the market may get more expensive but safer.
What happens to old cars under the programme?
The NADDC’s idea is that owners hand over vehicles that have reached the end of their life instead of dumping them. Cars would be dismantled, refurbished where possible and the parts resold. That builds on a market Nigerians already know well: the “Belgian parts” trade at places like Ladipo in Lagos. The difference would be a formal, regulated chain for collection and dismantling, with environmental standards for oil, batteries and tyres.
An opinion column from December 2025 argued the fee is a good idea but recommended a pilot phase before full rollout, citing enforcement as the main challenge. That is a fair concern in a market where informal dealing is common.
Pros and cons for car owners
Potential benefits
- A legal route to dispose of a dead car instead of paying to have it towed away or leaving it on the street.
- Possible growth in the spare-parts and recycling economy, creating jobs.
- Fewer abandoned vehicles blocking roads and drains.
Potential drawbacks
- One more cost at a time when clearing charges, FX swings and fuel prices already squeeze buyers. Compare the running costs in our fuel cost per km guide.
- No published amount yet, which makes budgeting hard.
- Enforcement and transparency risks: who collects the money, and how is it used?
How to prepare before you buy
- Ask the dealer or clearing agent in writing whether any recycling or ELV charge applies 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 cost until the official figure is published.
- Check official channels such as the NADDC and the Nigeria Customs Service for circulars before paying any “recycling fee” to an individual. Do not pay anyone claiming to collect it informally.
- Prefer documented vehicles. With pre-export certification and tighter import scrutiny, clean papers will matter more for resale value.
- Review your insurance and financing. If you are using a car loan, confirm whether new registration charges can be rolled in. See our car insurance guide for the other mandatory costs.
Frequently asked questions
Is the vehicle recycling fee already in force?
It was announced as starting in 2026, and the NADDC says the End-of-Life Vehicle programme is approved for implementation. However, the reports reviewed do not give a confirmed start date or a gazetted fee schedule, so confirm the current position with the NADDC before assuming it applies to your registration.
Will I pay it every year?
No. It has been described as a one-time fee paid at registration.
Does it apply to new cars or only tokunbo?
The reports describe a fee at vehicle registration generally, though one commentary referred specifically to imported used vehicles. Details on scope are still emerging.
Will it raise car prices?
Probably slightly, since dealers tend to pass on registration-related costs, but the size depends on a figure that has not been published.
Key takeaway
Nigeria’s proposed vehicle recycling fee is a one-time, registration-linked charge meant to fund end-of-life vehicle disposal, with the NADDC projecting over ₦150 billion a year. No official amount has been published, so budget a buffer, verify with official sources, and avoid paying anyone informally.
Disclaimer: Vehicle prices, import duties, fees and specs change frequently in Nigeria. Always confirm current figures with the dealer or the official source (NADDC, Nigeria Customs Service) before buying. This article reflects reports available at the time of writing, including statements attributed to the NADDC in December 2025.
