Pakistan brings in more used cars than any other country in its region — and by a large margin. A report by the Institute of Cost and Management Accountants (ICMA) notes that Pakistan imports around 34,000 used vehicles each year, compared to Thailand’s 21,802, Vietnam’s 532, and India’s 235.
While this reflects strong local demand and limited affordable options at home, other countries in Asia and Africa have taken stronger measures to regulate such imports — using age caps, inspections, taxes, and phased policies to protect consumers, the environment, and domestic industries.
How Other Countries Manage Used Car Imports
Bangladesh gives permission for used vehicles but enforces strict rules: cars must be under four years old, directly shipped from the country of origin, and carry proper de-registration papers. Importers also face customs duties, VAT, and inspections to ensure roadworthiness.
Sri Lanka lifted its five-year import ban in February 2025, but only permits the masses to import one car per year through registered importers. This controlled reopening is intended to stabilize the market without draining foreign exchange reserves.
India has some of the toughest limits. Used cars must be under three years old, right-hand drive, and meet emission and engine criteria. Documentation, testing, and duties of up to 125% make commercial import nearly impractical.
Kenya follows a “controlled liberalization” model. As of July 2025, only vehicles from 2018 onward can enter — effectively keeping the age cap at seven years. Pre-export inspections and roadworthiness checks are compulsory.
South Africa largely bans used car imports, making exceptions only for returning residents or immigrants, and even then, just one vehicle per family with permits and taxes.
Nigeria tightened rules in 2025: only vehicles manufactured in 2015 or later can be imported duty-free, while cars older than 10 years face bans or heavy penalties.
The Philippines permits used car imports only with a government-issued Certificate of Authority to Import. Duties include 40% customs tax, 10% VAT, and up to 100% ad valorem tax, depending on engine size.
Pakistan’s Shifting Policies
Pakistan’s own policies have swung back and forth for decades. In the 1990s, imports were mostly banned to save local assemblers, limiting choices and raising prices. In the 2000s, schemes like the Gift, Baggage, and Transfer of Residence programs let overseas Pakistanis bring in cars, but dealers quickly took advantage.
Lower duties in 2005 triggered a flood of small Japanese cars, until automakers pushed for restrictions again by 2008. In 2012, the maximum import age was cut to three years, slowing the inflow but keeping prices high.
From 2012 onward, the government repeatedly alternated between relaxing and tightening rules, trying to balance consumer needs with industry pressure and foreign exchange concerns.
The New Direction: 2025 Policy change
In September 2025, the government allowed commercial imports of cars up to five years old, with a phased duty reduction. Until June 30, 2026, eligible cars can enter with a 40% regulatory duty, which will drop by 10% each year and reach zero by FY30.
The major endeavor behind is to provide people access to more affordable vehicles while protecting local manufacturers and ensuring that imported cars meet environmental and safety standards. If implemented consistently, this could finally bring some balance to Pakistan’s car market.