ISLAMABAD – Pakistan’s automobile market is heading towards shake-up as the federal government ended 5-year age restriction on commercially imported used vehicles, opening the door to older foreign cars and raising hopes of cheaper, better-equipped options for buyers.
Auto experts warned that consumers expecting immediate price crash may be disappointed, as heavy import duties and additional regulatory requirements threaten to keep prices elevated. The change means registered commercial importers can now bring vehicles older than five years into Pakistan, provided they satisfy the applicable import regulations, environmental standards, safety requirements and mandatory inspections.
The removal of the five-year import restriction does not automatically guarantee cheaper vehicles. With 50% regulatory duty still applying to commercial imports, immediate and substantial price reductions appear unlikely. Instead, the first noticeable impact could be increased competition and a broader selection of imported cars.
Over time, planned duty reductions may create room for lower prices, particularly if importers can bring vehicles into the country at competitive costs. However, the possible effects on domestic manufacturing, market oversupply and long-term maintenance expenses remain significant concerns.
For now, Pakistan’s car buyers may be getting something different from what they expected: not necessarily a dramatic price crash, but the chance to buy bigger, more comfortable imported vehicles without substantially increasing their budgets.
Whether this policy becomes a breakthrough for affordable car ownership or introduces another wave of expensive-to-maintain vehicles will depend on how effectively the government balances import liberalisation, consumer protection and domestic industrial growth.
The announcement comes as PM Shehbaz Sharif has approved a new automobile policy, which is awaiting final approval from the federal cabinet. The proposed policy aims to intensify competition, encourage electric vehicle adoption, strengthen domestic automobile manufacturing and expand the industry’s export capabilities.
For years, restrictions on used vehicle imports limited the options available to Pakistani motorists. Previously, overseas Pakistanis could import qualifying used vehicles through three major channels: the baggage scheme, transfer of residence scheme and gift scheme. However, the government discontinued vehicle imports under the baggage scheme in 2025, leaving the other two arrangements operational.
Although federal government approved commercial imports of used vehicles in the 2024–25 budget, tough regulatory conditions prevented the initiative from taking off. According to industry representatives, practically no vehicles entered Pakistan through the commercial import arrangement during the following 18 months.
The latest decision seeks to break that deadlock by removing the five-year age ceiling and relaxing certain import conditions. However, a separate restriction under the gift scheme remains unchanged: vehicles brought into Pakistan through this arrangement cannot be transferred to another person’s name for one year after their arrival.
The removal of the five-year restriction has created an opportunity for importers to introduce older foreign vehicles into Pakistan’s market. All Pakistan Car Dealers and Importers Association Senior Vice Chairman Kamran Khan said that although the new rules permit cars older than five years, importers have been advised to focus on vehicles no more than 10 years old.
He explained that cars within this age range would be better positioned to meet mandatory inspection and regulatory standards. Importers will also face strict conditions regarding vehicle quality and documentation.
Imported vehicles must not be stolen or accident-damaged, while inspections before shipment and after arrival in Pakistan will remain compulsory. Businesses involved in commercial imports must be registered for income tax and sales tax and with the Engineering Development Board.
They must also ensure the availability of maintenance facilities and replacement parts. Importers lacking their own workshops or spare parts infrastructure may enter into agreements with established service providers. These requirements are intended to protect consumers, although they will also add to the overall cost of importing vehicles.
Despite removal of age restriction, the biggest obstacle to cheaper imported vehicles remains the government’s taxation policy. A 50% regulatory duty on commercial imports could prevent the expected reduction in vehicle prices. While lower prices may take time to materialise, the new policy could change what Pakistani consumers can purchase within their existing budgets.
Local Car Manufacturers to Face Pressure
The government’s attempt to increase automobile competition also triggered concerns about its possible impact on Pakistan’s domestic auto industry. Automotive sector experts warned that unrestricted expansion in used vehicle imports could create fresh challenges for local manufacturers and assemblers.
Pakistan already has numerous automobile models available through locally operating original equipment manufacturers, commonly known as OEMs.\ Introducing a wider variety of older imported vehicles could further intensify competition. Although competition can benefit consumers, experts warn that a poorly managed increase in imports could result in more vehicles entering the market than buyers can absorb.
Industry members argue that the government must also protect the long-term development of Pakistan’s automotive manufacturing sector as strengthening domestic production could generate employment, encourage technological development and improve the availability of affordable vehicles.
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