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Cubans can now buy new and used cars freely Cubans shocked at prices as foreign cars go on sale
(about 17 hours later)
Cubans are now able to buy modern cars freely for the first time since the revolution in 1959. Cubans have reacted with shock after foreign-made cars went on sale for the first time since the 1959 revolution at what some termed "crazy" prices.
Previously, Cubans had to get a government permit to buy new vehicles. That requirement has now been abolished but only a minority will benefit. The state has a monopoly on new cars and is marking up prices 400% or more.
The state has a monopoly on new car sales and is marking up prices by 400% or more. A Peugeot 508 costing £32,000 ($53,000) in the UK is listed at $262,000. State salaries average about $20 a month.
Freeing up car sales is the latest in a series of reforms in Communist-run Cuba. Freeing up car sales is the latest in a series of reforms in Communist-run Cuba. The requirement for a permit to buy new vehicles has been abolished.
However, only a minority will benefit.
The BBC's Sarah Rainsford, in Havana, says the stream of people at one used-car store in Havana's upmarket Miramar district were in for a shock.
She says the most commonly uttered phrases were "this is madness" and "what a lack of respect", referring to the government.
One of those outside the dealership, Suzanne, told the BBC: "The prices are crazy. No Cuban who works for the state can buy at that price. They have zero chance of getting a car."
Another, Antonio, said: "We're speechless, it's a big surprise. I don't know what the government's strategy is. Maybe this is just a test phase. But the prices are excessive."
The government argues profits will be placed in a special fund to develop public transport.
Our correspondent says that the money is desperately needed, as there is a dire shortage of transport and what there is is often in a decrepit state.
But one Cuban resident, Daniel Rojas, asked: "At these prices, how many people can buy the cars? So where's the money to invest in public transport if no-one can buy them?"
Until new regulations in 2011, people could only sell cars built before the 1959 revolution.Until new regulations in 2011, people could only sell cars built before the 1959 revolution.
For new cars, people needed a much-sought government permit - a privilege mainly bestowed on senior officials, top athletes and artists.For new cars, people needed a much-sought government permit - a privilege mainly bestowed on senior officials, top athletes and artists.
Permits were often traded on the black market for large sums of cash. The permits were often traded on the black market for large sums of cash.
Now, Cubans will no longer need the government's approval to buy new cars from state-owned sellers. The latest move is part of a series of reforms driven by President Raul Castro aimed at updating the Cuban economic model.
But prices remain out of reach for many.
The BBC's Sarah Rainsford, in Havana, says a new Peugeot 508 estate at a showroom in the Cuban capital is on sale for an extraordinary $262,000 (£160,000).
That is eight times more than what it would cost in Britain, for example.
And used cars are not much cheaper. Our correspondent says a five-year-old Peugeot 206 is priced at $85,000 (£52,000).
The vast majority of people in Cuba earn a state wage of around $20 (£12) per month.
The government says some of the profits from sales will go towards developing Cuba's decrepit public transport system.
'Freed up'
Following reforms adopted two years ago, Cubans could buy and sell used cars from each other, but had still to request authorisation from the government to purchase a new vehicle or a second-hand one from state-controlled retailers.
Priority for the permits was given to people "in positions of benefit to the government", such as doctors and diplomats.
From Friday, new regulations came into force allowing "the retail sale of new and used motorcycles, cars, vans, small trucks and mini buses for Cubans and foreign residents, companies and diplomats".
People who already have permits are expected to be given priority, however. And buyers will still need to purchase vehicles through state retailers.
Cubans and foreigners will not be able to import their own cars.
The move is part of a series of reforms driven by President Raul Castro aimed at updating the Cuban economic model.
Raul Castro has championed limited free-market reforms since taking the reins of power from his brother Fidel in 2008.Raul Castro has championed limited free-market reforms since taking the reins of power from his brother Fidel in 2008.