GO
Loading...

Cuba lifts 50-year-old regulations on car sales

For the first time since the 1959 revolution, Cubans will have the right to buy new and used vehicles from the state without government permission, official media announced on Thursday, another step toward greater economic freedom on the communist-led island.

Under a reform two years ago, Cubans can buy and sell used cars from each other, but must request authorization from the government to purchase a new vehicle or second-hand one, usually a relatively modern rental car, from state retailers.

(Read more: Car sold for $100 million likely by 2018)

A driver stands by his green Lada in Matanzas, Cuba
Philip Walker | Flickr Vision | Getty Images
A driver stands by his green Lada in Matanzas, Cuba

The Communist Party newspaper, Granma, said the Council of Ministers approved new regulations on Wednesday that "eliminate existing mechanisms of approval for the purchase of motor vehicles from the state."

As a result, Granma said, "the retail sale of new and used motorcycles, cars, vans, small trucks and mini buses for Cubans and foreign residents, companies and diplomats is freed up."

The Cuban state maintains a monopoly on the retail sale of cars.

(Read more: Robots, self-driving cars — what's Google doing?)

The liberalizing of car sales was one of more than 300 reforms put forth by President Raul Castro, who took over for his ailing brother Fidel in 2008, and approved in 2011 at a congress of the Communist Party, Cuba's only legal political party.

The proposed changes put a greater emphasis on private initiative, which had been largely stifled under Cuba's Soviet-style system, and less government control over the sale and purchase of personal property such as homes and cars.

There are now tens of thousands of small private businesses in Cuba, and thousands of farm, construction, transportation and other types of cooperatives, all of which should benefit from the new regulations. Many Cubans who receive money from relatives living abroad should also be helped.

Before September 2011, only automobiles that were in Cuba before the 1959 revolution could be freely bought and sold, which is why there are so many 1950s or older cars, most of them American-made, rumbling through Cuban streets.

(Read more: The 10 greatest sports cars of all time)

There are also many Soviet-made cars, dating from the era when the Soviet Union was the island's biggest ally and benefactor.

Newer models are largely in state hands and sold used at a relatively low price to select individuals, for example, Cuban diplomats and doctors who serve abroad, then often resell them at four or five times the price.

Cubans and foreigners need government permission to import a new or used car, a regulation Granma said was not been lifted.

The new regulations will be published in the official Gazette in the coming days and become law 30 days later. They were expected to include stiff taxes, currently 100 percent for new cars, with the proceeds going to fund the country's decrepit public transportation system, Granma said.

Contact Autos

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More