Pakistan’s New Auto Policy Proposes 20% Cap on Car Booking Advances
Car buyers in Pakistan may need to pay less upfront if the government approves and implements a proposed 20% advance payment cap. The Automotive Industry Development and Export Policy 2026–31 proposes to limit vehicle manufacturers from demanding more than 20% of a vehicle’s price as an advance payment at the time of booking. The proposal aims to protect customers from excessive upfront demands and improve transparency in the automotive market.
How much would buyers pay under the proposed limit?
The advance payment would depend on the vehicle price under the proposed policy. For example, a buyer who books a vehicle worth Rs 4 million would pay a maximum advance of Rs 800,000. For a vehicle priced at Rs 5 million, the proposed limit would be Rs 1 million.
This could reduce the amount customers need to arrange upfront, making vehicle booking more manageable for buyers.
Part of a wider plan for the auto industry?
The booking advance proposal is one of several measures included in the Pakistan Automotive Policy 2026–31. The policy focuses on improving vehicle affordability, increasing local manufacturing, promoting electric vehicles, strengthening safety standards, and expanding automotive exports. It also sets a target of achieving $ 6 billion in automotive exports over five years.
Prime Minister Shehbaz Sharif approved the final draft after IMF approval. The draft is now under consideration by the Federal Cabinet before proceeding through the remaining approval process and implementation.
What should car buyers do now?
For now, customers should keep in mind that the proposed 20% limit could provide financial relief once it takes effect. They should keep an eye on the latest booking terms and payment schedules issued by vehicle manufacturers before making a payment.
If approved and implemented, the proposal could help reduce the financial burden on car buyers. However, its actual impact will depend on how effectively the government implements the new policy.
