ISLAMABAD – Car prices are all-time high in Pakistan, but Budget 2025-26 may make imported cars cheaper, with prices expected to move down by Rs10 lac.

The relief is expected as the federal government considers cutting import duties on used vehicles and extending age limit for imports. Pakistan Motor Dealers Association (APMDA) officials hope these steps lowerthe  prices of small Japanese cars, making them more accessible to the public.

Dealers Association Chairman said the federal government may announce cut in customs duties on imported used vehicles next month. The permissible age limit for imported cars may be increased from 3 to 5 years.

“If these proposals are implemented, the price of small cars could fall by Rs5Lac to Rs.10Lac. A better quality imported Japanese car may be available for under Rs. 2 million.

Budget 2025-26

Pakistan assured International Monetary Fund (IMF) that high import duties and taxes on used vehicles will be gradually reduced over the next five years. A competitive tax  will replace the current system. Currently, imported cars are subject to a combined duty of 96% to 475%, which Shehzad says should be reduced by 20percent each year.

Highlighting price disparity, Shehzad said cheapest locally assembled car in Pakistan costs Rs3.1 million, while the same model in a neighboring country is priced at just Rs375,000. Even after adjusting for currency differences, the car should cost around Rs. 1.3 million in Pakistan. With duty reforms, we can offer Japanese cars below Rs. 2 million.

He further explained that 5-year-old vehicles in Japan are cheaper than 3-year-old models. This difference would directly benefit Pakistani consumers in terms of affordability.

If approved, used car imports could rise to 70,000–80,000 units in the coming fiscal year—up from the current 30,000. This increase is expected to boost government revenues by up to 70% through higher tax collection.

Which Cars will become Cheaper in Pakistan after Budget 2025-26? full list here