Used Car Prices in Pakistan Likely to Drop After Federal Budget 2025–26

In a major development for car buyers in Pakistan, used car prices are expected to decline significantly following the Federal Budget 2025–26, if proposed policy changes on vehicle imports are approved. These changes are poised to benefit consumers by reducing the overall cost of owning a vehicle, particularly for middle- and lower-income segments.

According to Haji Muhammad Shehzad, Chairman of the All Pakistan Motor Dealers Association (APMDA), the government is considering increasing the import age limit for used vehicles from three to five years. This policy shift, combined with a gradual reduction in import duties, could open the door for more affordable used vehicles in the Pakistani market.

The proposal aligns with Pakistan’s commitments under its agreement with the International Monetary Fund (IMF), which emphasizes easing import restrictions and implementing more consumer-friendly economic policies to combat ongoing financial pressures.

Why This Matters for Car Buyers?

Shehzad highlights that a five-year-old imported Japanese vehicle can cost almost 50% less than a three-year-old version. The expected price drop could range from Rs. 500,000 to Rs. 1 million, making it significantly easier for many Pakistanis to afford reliable transportation.

In particular, small car prices could fall below Rs. 2 million, a critical affordability threshold for many families. This shift would improve accessibility and mobility for thousands of new buyers across Pakistan.

Boosting Competition and Government Revenue

With these changes, the APMDA anticipates that vehicle imports could jump to 70,000–80,000 units in the coming fiscal year—more than double the 30,000 units imported this year. This influx would not only stimulate competition in the used car market but also increase tax revenue for the government.

Economists and industry experts agree that a more open and competitive market will benefit consumers through better variety, pricing, and quality of vehicles available in the country.

If implemented, the proposed policies in the Federal Budget 2025–26 could revolutionize the used car market in Pakistan. Lower import duties and an expanded age limit for imported vehicles would make used cars more affordable and accessible, offering a timely relief for budget-conscious consumers during a period of economic uncertainty.

Afsheen Gohar

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