Cars Expected to Get Cheaper in Budget 2025: What Buyers Should Know

Islamabad, May 18, 2025: As the 2025-26 budget approaches, all focus is on the auto sector, where car prices in Pakistan are expected to drop due to important changes.

Sources close to matter said Pakistani government is considering proposal to raise age limit for importing used vehicles from 3 to 5 years in upcoming 2025–26 budget. This move is to standardize age limit across all types of vehicle, including passenger cars and SUVs, giving buyers in Pakistan more options.

Currently, Pakistan, with its population of 242 million, allows importing used cars up to three years old and larger jeeps up to five years under special schemes. The new plan is to set a uniform five-year age limit for every vehicle category. Besides this, the government is also reviewing the tariffs on Completely Built-Up (CBU) vehicles.

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Discussions are ongoing to gradually remove regulatory duties and reduce tariffs below 10 percent, with the goal of bringing overall car import duties down to single digits within five years.

Popular Imported Cars in Pakistan

The Federal Board of Revenue (FBR) has also put in place stricter rules to stop misuse of used car import schemes. Previously, schemes like personal baggage, transfer of residence, and gift imports were often abused.

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Now, only overseas Pakistanis who have not imported, gifted, or received a car in the past two years can use these schemes.

The FBR has also made clear tax rules for used car auctions. If a car is in good working condition and the tax was already paid during import or local purchase, no extra 18% sales tax will be charged. But for cars that are damaged or unfit, the tax will apply at auction no matter what.

If these changes are approved, car buyers in Pakistan could benefit from more affordable and varied options in the used car market.