New Auto Policy in Pakistan may offer Loans up to Rs1 Crore with 7 Years Installment Plans

ISLAMABAD – If you are planning to buy low-budget car in Pakistan, there’s some potentially good news on horizon. The government is working on a major overhaul of the auto sector under draft AIDEP 2026–31, which could make cars more affordable through easier financing, lower down payments, and longer repayment plans. The country is preparing sweeping transformation of its automobile industry under the draft Auto Industry Development & Export Policy (AIDEP) 2026–31. The proposed reforms aim to revive struggling auto market, restore consumer demand, and make vehicle ownership more affordable after years of rising prices, strict financing conditions, and economic pressure. As per reports, the government is considering easing of auto financing rules to boost car sales. Under the draft, eligible locally manufactured vehicles could be financed up to Rs1 Crore. Loan repayment periods may be extended to seven years, while the minimum down payment could be reduced to 15%. This will help bring back buyers who have been priced out of the market due to high interest rates and tighter lending conditions. A major and potentially controversial change under consideration is the phased liberalization of used vehicle imports. While stricter inspection and certification requirements will apply, import duties could gradually be reduced from 40% to zero by FY2030. At the same time, depreciation benefits on imported used vehicles would be capped at 30% to balance affordability with protection for local manufacturers. The draft policy includes strict new rules aimed at protecting car buyers and improving transparency in the market. These include fixed booking prices to prevent sudden price hikes, penalties for delivery delays linked to KIBOR + 3%, and a cap of 20% on advance booking payments. In addition, manufacturers or authorized importers will be responsible for full warranty coverage, and spare parts profit margins at 3S dealerships would be capped at 20%. The government is focusing