Government lifts five-year age limit on used vehicle imports

The federal government has removed the five-year age limit on used vehicles brought into the country on a commercial basis, allowing importers to ship cars older than five years. The Ministry of Commerce said in a notification that the restriction was lifted with effect from 30 October 2026.

Commercial imports of used vehicles remain subject to the requirements of the import policy, and vehicles will have to meet environmental and safety standards, the ministry said.

The change follows Prime Minister Shehbaz Sharif's approval of a new auto policy, which will now go to the federal cabinet for final approval. The policy proposes steps to increase competition in the domestic automobile industry, encourage the use of electric vehicles and raise the export capacity of local vehicle manufacturing.

Overseas Pakistanis could previously import vehicles up to five years old under the baggage, transfer of residence and gift schemes, said H M Shehzad, chairman of the All Pakistan Motor Dealers Association, who spoke to BBC Urdu. The government banned imports under the baggage scheme in 2025 and kept the other two schemes in place.

Shehzad said a major obstacle in the transfer of residence scheme was that most overseas Pakistanis live in the Middle East, where cars are left-hand drive, while traffic in Pakistan moves on right-hand drive vehicles.

The 2024-25 budget allowed commercial imports of used vehicles, but the conditions attached were so strict that practically no vehicle was imported over the past year and a half. The new notification eases several of those conditions.

Shehzad said the gift scheme keeps a condition that a vehicle imported under it cannot be transferred to another person's name for one year after it reaches Pakistan. He said an imported vehicle must not be accident-damaged or stolen, and inspection before shipment and again after arrival is mandatory. Commercial importers must be registered for income tax and sales tax and with the Engineering Development Board; a firm without its own workshop and spare parts facility can sign an agreement with one that has them.

Kamran Khan, senior vice chairman of the All Pakistan Car Dealers and Importers Association, told BBC Urdu that although older cars can now be imported, he has advised importers to bring in vehicles no more than ten years old so that pre-inspection and other conditions can be met without difficulty.

Regulatory duty on commercial imports is fixed at 50 percent, against 20 percent under the gift scheme, according to Shehzad. The rate is to fall by 10 percentage points each year, which could pull prices down over the next five years.

Kamran Khan said buyers stand to gain. For the price of a locally assembled 660cc car, he said, a customer could get a ten-year-old imported vehicle with a larger engine and more comfort. He acknowledged that importers work to earn money and will benefit, but said consumers would too.

Mashhood Ali Khan, an auto sector expert, said the government expects greater competition to give consumers affordable vehicles, but reservations about the policy's effects have surfaced. He said the proposed policy contains no clear mechanism to cap the market's total size or the number of imported vehicles, and oversupply could hurt both local assemblers and used-car importers. Spare parts and repairs could become a serious problem three years on, he said, with some parts missing from the market and others selling at high prices.