Used Car Market Trends in Pakistan 2025: Prices, Demand & Buying Guide

Market Snapshot 2025

The used car market in Pakistan is experiencing steady growth in 2025 after years of uncertainty. According to auto industry reports, car sales increased by 35% year-on-year during the first half of 2025, with Suzuki capturing nearly half of the market share, followed by Toyota and Honda. Despite a 49% month-on-month dip in July 2025 due to post-budget price hikes, overall demand was still 28% higher compared to the same month last year.

The State Bank of Pakistan reduced the policy rate from 22% in 2024 to 11% in 2025, making car loans more affordable and fueling demand in the used car market. However, the government introduced a Climate Support/NEV levy ranging from 1% to 3% on new vehicles, which pushed prices upward and diverted buyers toward used cars.

Key Drivers of the Used Car Market

• Affordable Financing: Reduced interest rates have revived demand, especially for small hatchbacks and compact sedans.
• Rising New Car Prices: The NEV levy has made new cars costlier, boosting interest in second-hand options.
• Tax Restrictions: Non-filers are barred from purchasing or registering cars worth more than Rs 7 million, increasing demand for mid-range used vehicles.
• Limited Imports: Used car imports remain confined to baggage, gift, and transfer of residence schemes, usually limited to vehicles up to 3 years old.

Price Trends Across Segments

• 660–1000cc Hatchbacks (Suzuki Alto, Wagon R, Mira, Cultus): Strong demand has kept prices firm.
• 1300–1500cc Sedans (Toyota Corolla 1.3, Honda City, Toyota Yaris): Prices remain stable with slight upward movement due to better financing availability.
• 1800cc+ Premium Cars (Honda Civic, Toyota Corolla 1.8, SUVs): Mixed performance as higher levies and filer restrictions affect demand.
• Hybrids and JDM Imports (Toyota Aqua, Prius, Vezel, CH-R): Popular among buyers, though prices depend heavily on exchange rates and import duties.

Buyer Preferences in 2025

• Budget-Friendly Options: Suzuki Alto, Wagon R, and Toyota Vitz are leading choices for first-time buyers.
• Family Sedans: Toyota Corolla and Honda City continue to dominate due to reliability and resale value.
• SUV Segment: Kia Sportage, Hyundai Tucson, and Honda HR-V remain popular in the used car market.

Financing and Taxation in 2025

• Policy Rate: Lowered to 11%, easing the burden of car loans.
• NEV Levy: Applied at 1% for cars up to 1300cc, 2% for 1301–1800cc, and 3% for vehicles above 1800cc.
• Tax Compliance: Cars priced over Rs 7 million are restricted to filers only, making compliance essential in higher-value purchases.

Imports and Supply Trends

Pakistan’s used car market is shaped by government import schemes. Cars imported under baggage, transfer of residence, and gift schemes must not exceed 3 years of age. Duties and taxes are payable in foreign currency, which keeps prices higher. Future policies may allow commercial used car imports, potentially impacting supply in late 2025 or 2026.

City-Level Market Insights

• Karachi: Pakistan’s largest used car hub with the highest liquidity and quicker resale cycles.
• Lahore: Strong demand for compact hatchbacks and sedans.
• Islamabad & Rawalpindi: Buyers prefer SUVs, premium sedans, and well-maintained vehicles.

Buyer Checklist for 2025

1. Verify service history, auction sheet (for imports), and registration documents.
2. Ensure filer status for high-value vehicles.
3. Calculate long-term running costs such as fuel, tyres, and batteries.
4. Get the vehicle inspected before final purchase.

Outlook for Late 2025

The outlook for Pakistan’s used car market is stable to positive in smaller and mid-range segments. Lower interest rates will continue to encourage financing, while rising new car prices will support resale values. However, exchange rate fluctuations, further levies, or new government tax policies could impact affordability in the months ahead.

FAQs on Used Car Market in Pakistan 2025

Are used car prices falling in 2025?
No. Prices are mostly stable or slightly rising, especially in small hatchbacks and compact sedans.

What documents should buyers check?
Registration, tax receipts, service history, and auction sheets for imported cars are essential.

Can non-filers buy used cars?
Yes, but only cars priced below Rs 7 million.