Is It the Right Time to Buy a Used Imported Car?

Jawad

24 Jun 2025

116

Is It the Right Time to Buy a Used Imported Car?

A new policy proposal in Pakistan has sparked widespread interest and debate, particularly among auto dealers and overseas Pakistanis. The potential plan involves allowing commercial imports of used cars, a move that could reshape the used car market. While this sounds like a bold reform, many are questioning whether it’s a true game-changer or just a strategy to gain favor with global financial bodies.

Understanding the Current System

At present, used imported cars are only allowed into Pakistan under specific schemes designed for overseas Pakistanis. These include the Baggage Scheme, Gift Scheme, and Transfer of Residence (TR) program. Each of these permits individuals—not businesses—to bring in vehicles for personal use, under defined conditions.

Here’s how it works:

Vehicles must be no more than 3 years old.
Jeeps are allowed up to 5 years old.
Car import prices are adjusted based on age through depreciation, meaning cheapest imported cars tend to be older models.

This setup benefits returning expatriates or those sending cars to family, but not the general public or commercial entities looking to buy imported cars in bulk.

What the New Policy Proposes

The proposed shift is significant. For the first time, registered dealerships could be allowed to commercially import used cars. Unlike the older schemes, this would not require an overseas background or a personal connection. Payments would go through official banks, and second hand imports could be brought in specifically for sale.

In theory, this could improve car availability, enhance competition, and lead to more affordable imported cars for buyers. It might even result in better used car deals for people wanting alternatives to overpriced local options.

The Depreciation Dilemma

Despite the optimistic outlook, there’s a major flaw. Under the current personal-use schemes, imported car prices are reduced thanks to depreciation. For example, a 3-year-old car can receive up to 60% off the taxable value, slashing import duties.

In contrast, the new commercial import policy does not offer depreciation. A dealership bringing in the same car would have to pay full customs duty on its assessed value—no reductions.

This pricing gap raises serious questions. Why would dealerships or consumers choose a more expensive commercial route when they can save through personal schemes?

If the government truly aims to improve access to used imported cars and promote a fair used car market in Pakistan, then aligning customs duties and depreciation rules is essential. Without these changes, the commercial import plan risks becoming an empty gesture rather than a genuine reform.

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