Tehran, Iran – Hossein, a 32-year-old marketing specialist based in Tehran, has been thinking of replacing his 13-year-old Iranian-made car with a newer model. Even though he earns about four-and-a-half times the minimum wage after a recent pay rise – his salary is now close to 900 million rials (about $390 at the current exchange rate) – imported vehicles are not even remotely affordable for him. Even finding a locally made car might be out of his budget, with an economic crisis gripping the country since the United States and Israel launched a surprise war on Iran on February 28 and later enacted a crippling siege and sanctions on the country.
His old manual Peugeot 206 model, an originally French-made car but now produced domestically after foreign counterparts left Iran due to sanctions, can fetch up to 10 billion rials ($4,350) if he sells it towards making a new purchase. However, his replacement options are limited. Upgrading to a slightly improved Peugeot 207 with an automatic gearbox could cost him 28 billion rials ($12,170) now.
This means that, after selling his car, he would need more than 20 months of his entire salary. A domestic sedan Shahin model costs more than 31 billion rials ($13,480), and a crossover Reera is priced at more than 43 billion rials ($18,700). With these options, he would need to save about 24 months and 37 months of his whole salary, respectively, and that is if prices remain stable and he does not spend a rial on anything else.
But the reality of the fast-rising living costs and lagging incomes in Iran means he can barely put aside any money, let alone afford a new car. Domestic car prices have mostly risen 40 to 80 percent since the start of the war, while some vehicles sell for more than 130 percent of their September 2025 costs. The costs of maintaining the vehicles are also rising much faster than people’s salaries.
Domestically produced tyres, motor oil, brake pads and clutch kits have at least doubled since last year, with some car parts having more than tripled in price. Domestic vehicles have generally low safety standards, meaning that they contribute to staggering road accident deaths. At least 1,609 Iranians have been killed so far on intercity roads in the current month of Shahrivar of the solar Hijri calendar, which ends on September 22.
More than 20,000 people lose their lives on the roads every year. In comparison, fewer people in the whole of the European Union, nearly five times Iran’s population, died on roads last year. Iran’s fuel-guzzling cars also contribute to smoke-congested city streets, degrade vehicles faster and increase fuel costs, just as petrol prices have risen for users.
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