Why There Are So Many Expensive Cars in Georgia — and Why the Government Wants to Stop the Imports

At first glance, Tbilisi streets can feel confusing.

Luxury SUVs parked next to Soviet-era apartment blocks. Expensive Japanese 4x4s standing outside small village houses. Cars that look as if they belong in far wealthier countries.

For many visitors — and even locals — the same question comes up repeatedly:

How can people in Georgia afford so many expensive cars?

The answer lies not in widespread prosperity, but in a unique mix of economics, culture, and policy — a system that the government is now trying to change.

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A Rapidly Growing Car Population

The scale of Georgia’s car market has expanded at a remarkable pace.

According to Prime Minister Irakli Kobakhidze, in 2012 there were approximately 864,000 registered vehicles in Georgia. As of this year, that number has exceeded 2 million.

This growth has more than doubled the number of cars on Georgian roads in just over a decade.

The ruling party, Georgian Dream, argues that this surge is now creating serious problems — from traffic congestion to environmental damage.

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Georgia as a Regional Used-Car Hub

One key reason behind the explosion in car numbers is Georgia’s role as a regional hub for used vehicle imports.

Each year, hundreds of thousands of cars are imported from:

• The United States
• Europe
• Japan
• South Korea

Many of these vehicles originate from insurance auctions such as Copart and Insurance Auto Auctions.

A significant share of these imports are:

• Accident-damaged vehicles
• Flood-damaged cars
• Vehicles written off as “totaled” under strict insurance rules abroad

In Georgia, these cars are repaired at relatively low cost, cosmetically restored, and either:

• Sold locally
• Re-exported to Armenia, Azerbaijan, Russia, and other former Soviet states

This system makes vehicles that look expensive far cheaper than they would be elsewhere.

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Why SUVs Dominate Georgian Roads

Large SUVs are especially common for practical reasons.

In the United States, SUVs are among the most popular vehicle types. When insurers declare them totaled, they often appear at auction at relatively low prices. Once repaired in Georgia, they can be resold profitably — even if their technical condition is far from ideal.

What appears to be luxury is often simply the result of:

• Salvage pricing
• Low repair costs
• Minimal regulation

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Culture, Status, and the Importance of Appearance

There is also a strong cultural component.

Across the Caucasus, visible success carries social weight. A car is a public symbol — far more noticeable than housing quality or savings.

In practice, this means:

• Cars are prioritized over property upgrades
• Image often outweighs long-term financial logic
• A vehicle may cost nearly as much as the home it is parked beside

This dynamic helps explain why expensive-looking cars are common even in modest neighborhoods.

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Credit, Loans, and Long-Term Debt

Many vehicles are not purchased outright.

Georgia has a long history of high-interest consumer lending, particularly since the 1990s. Car loans are often structured to be just affordable enough to maintain — but costly over time.

As a result:

• Some cars are still being paid off long after their value drops
• Interest payments can exceed the car’s real worth
• Vehicles may be refinanced or resold multiple times

Ownership, in many cases, is more theoretical than real.

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Why Car Ownership Is Cheap — on Paper

Compared to many Western countries, cars are relatively inexpensive to maintain in Georgia:

• No annual vehicle tax
• Insurance is optional and often skipped
• Fuel prices are relatively low
• Repairs are cheap
• LPG conversions are common, even on hybrid vehicles

This leads to some uniquely Georgian solutions. It is not unusual to see a Toyota Prius — already designed to save fuel — converted to run on LPG as well. In effect, a hybrid car running on gas, electricity, and petrol at the same time. From a purely technical standpoint it makes little sense, but from a cost-per-kilometer perspective, it works.

These factors make owning multiple cars financially possible — even if it isn’t economically sensible.

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The Government’s Proposed Import Ban

In response to rising congestion and environmental concerns, the government has introduced a draft law that would ban the import of cars older than six years.

According to Kobakhidze, this measure is intended to:

• Reduce traffic overload
• Improve air quality
• Protect public health
• Encourage newer, cleaner vehicles

Some limited exceptions may apply, but the general direction is clear: older vehicles are no longer welcome.

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What This Could Change

If adopted, the law would mark a turning point for Georgia’s automotive market.

Likely effects include:

• A sharp decline in used and salvage vehicle imports
• Disruption of the re-export business
• Higher vehicle prices domestically
• Reduced availability of “cosmetically restored” cars

Supporters argue this is necessary for environmental and public health reasons. Critics warn it may place newer vehicles further out of reach for average households.

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The Reality Behind the Illusion

Georgia’s streets are not filled with widespread wealth.

They reflect:

• A massive salvage import industry
• Cheap repairs and weak oversight
• Easy access to credit
• Cultural emphasis on visible success

The government’s proposed restrictions signal an attempt to unwind this system — or at least bring it under control.

Whether the country is ready for the economic and social consequences remains an open question.