In a country where the average monthly wage is US$20, vehicles with markups of 400 percent or more have become the object of disgust and despair.

HAVANA, Cuba, Friday January 10, 2014 – In the week since Cubans were granted the right to buy new and used vehicles from the state without special permission, markups of 400 percent or more have left potential buyers with a bitter taste in their mouths and the conviction that the more things change, the more they stay the same.

The state-run Peugeot dealership in Havana offers prices ranging from the equivalent of a whopping US$91,000 for a 2013 model 206 to an unbelievable $262,000 for a 508, prompting would-be customers to walk away in disgust.

On the other side of town, more than a hundred used hire cars are on sale for prices in the $25,000 range. A 2005 Renault with a price tag equivalent to $25,000 is available outside the country on the Internet for $3,000.

To rub salt into the wound, the average monthly wage in Cuba, where four out of five of the 5 million-strong labour force work for the state, is the equivalent of about US$20, leaving angry Cubans to conclude that they will never own a new or near-new vehicle as long as they live.

For the past two years, Cubans have been permitted to buy and sell used cars from one another, but until last Friday had to request authorization from the government to buy a new or second-hand vehicle, often a rental car, from state retailers.

Until the September 2011 reform, only vehicles that were in Cuba prior to the 1959 revolution could be freely bought and sold, which accounts for the abundance of 1950s or older cars, most of them veterans of the golden days of Detroit.

Many Russian cars, dating from the era when the Soviet Union was Cuba’s biggest ally, also form part of the island’s living museum of vintage rolling stock.

The decades-old ban on importing cars and the need for permission to purchase from the state has left nine out of 10 Cuban households without a car and dependent on the dilapidated public transportation system.

Liberalizing car sales was one of more than 300 reforms introduced by President Raul Castro and approved in 2011. The changes put a greater emphasis on private initiative and less government control over the sale and purchase of personal property such as homes and cars.

But as John Kirk, one of Canada’s leading academic experts on Latin America and author of a number of books on Cuba, said: “These prices will clearly be outside the purchasing capability of the vast majority of Cubans, even with the support from relatives abroad. In essence, they represent a luxury tax imposed by the government on the nouveau riches of Cuba.”