In 2025, the used car market in Pakistan is experiencing a noticeable surge in prices, leaving many buyers frustrated and puzzled. While the demand for second-hand cars continues to rise, so do the costs. For decades, buying a used car was considered a budget-friendly option, but in recent years, it has become almost as expensive as buying a new car — sometimes even more.
So, why are second-hand cars becoming more expensive in Pakistan? Here’s a complete breakdown of the factors shaping the market in 2025.
1. Economic Impact and Inflation
Even though overall inflation in Pakistan has slightly stabilized after years of economic turbulence, its effects are still visible in the automobile market. High interest rates, currency devaluation, and rising operational costs have driven new car prices to historic highs. This ripple effect has pushed more people toward the used car market, creating extra demand — and wherever demand increases, prices naturally follow.
Additionally, the rupee’s weakness against the dollar has increased the landed cost of imported parts and vehicles, making it harder for car owners to maintain their vehicles, which further pushes up the market value of well-maintained second-hand cars.
2. Restrictions on New Car Imports
Government restrictions on new car imports continue to choke supply in Pakistan. Import duties, regulatory taxes, and the age limit on imported cars (previously capped at 3 years) have limited the availability of imported vehicles. Even with recent policy changes in 2025, the relaxation in age limit and duties is gradual, meaning immediate relief for car buyers is minimal.
The reduced supply of both brand-new and imported vehicles means the used car market remains the go-to option — with sellers demanding higher prices.
3. Skyrocketing New Car Prices
With local car manufacturers consistently increasing their prices, many middle-class families are forced to shift toward used cars. The new car price hikes from brands like Suzuki, Toyota, Honda, and KIA have made entry-level vehicles unaffordable for the average buyer.
For example, cars like the Suzuki Alto, previously seen as affordable, have crossed over PKR 3 million in 2025, making even basic models a luxury. This trend is fueling demand for cheaper, older models — pushing up prices in the used car segment.
4. High Demand, Low Supply
The supply-and-demand imbalance is the core reason for price increases. In Pakistan, more people need personal transportation than ever before, especially in urban centers like Karachi, Lahore, and Islamabad. However, due to limited production, import restrictions, and reduced new car sales, used cars have become a hot commodity, leading to bidding wars and inflated asking prices.
5. Rise of Online Car Selling Platforms
The rise of online platforms like Famewheels and social media marketplaces has changed the dynamics of the used car market. While these platforms offer convenience, they also promote higher prices. Sellers see similar models listed at high prices and adjust their asking prices accordingly, creating an artificial upward trend.
Unfortunately, there’s little regulation on these platforms, so speculative pricing has become common, further inflating used car values beyond reasonable levels.
6. Speculation and Market Manipulation
Market manipulation is another major factor. Many dealers stockpile popular used car models and create artificial scarcity. This forces prices upward, especially during high-demand seasons like Ramadan, Eid, and year-end.
Price manipulation in the used car market is rarely controlled, and buyers often find themselves paying more than the true market value for average-condition vehicles.
7. Delayed Policy Benefits
While recent government reforms under the Auto Industry Policy 2025 include plans to increase the import age limit and reduce import duties, these changes will take time to impact the market. Many of these reforms are expected to ease the market starting from late 2026 or 2027. Until then, used car prices are likely to remain high due to slow policy implementation.
What Buyers Should Expect
The used car market in Pakistan during 2025 remains a seller’s market. High demand, economic pressures, restricted imports, and speculative pricing have all contributed to making used cars more expensive than ever before.
For car buyers:
- Be prepared for inflated prices in the short term.
- If you have flexibility, consider waiting until late 2026 when market conditions may improve.
- Always verify vehicle condition thoroughly and avoid overpaying based on market hype.
- Monitor government policies on imports and taxes — these will play a major role in shaping the market in the next two years.
Final Thoughts
The rise in second-hand car prices reflects broader economic challenges and market limitations in Pakistan. While the situation may improve in the future, 2025 will continue to be a difficult year for car buyers. Smart negotiation, proper vehicle inspection, and market research are essential for anyone looking to buy a used car in Pakistan today.
