Can You Finance an Imported Used Car in Pakistan? What the Rules Say
Used car imports are increasing. In September, there were 2,276 arrivals, compared to 48 in May. The question now being asked by many buyers is, can I get a bank loan for one? The answer is no.
The Short Answer
State Bank of Pakistan (SBP) regulations prohibit banks from financing cars being imported from abroad. It includes both new and used cars. The rule dates back to September 2021 and still applies today.
Why did SBP Make This Rule?
This purpose is to restrain imports and reduce the trade imbalance. The same package also strengthened some of the rules:
- The length of time for maximum auto financing has reduced from seven years to five years.
- A decrease in the debt burden from 50 to 40 percent of income.
- Each individual was restricted to financing only his/her vehicle up to Rs. 3 million.
SBP kept locally made cars up to 1,000cc and locally made electric vehicles outside the tighter limits. It was looking to safeguard the lower and middle income purchasers.
What Banks Still Finance?
New and used cars manufactured or assembled locally are financed by banks. There is an age limit on used cars. For instance, BankIslami offers financing of up to 9 years at the time of financing and 12 years at the end of the loan.
The hold time is based on the size of the engine. HBL Islamic and BankIslami offer a selection of 1 to 5 year finance for cars up to 1000cc. One to three years is the limit for above 1,000cc.
There are a number of rules that apply in most instances to loans.
- Most banks require a down payment of at least 30%.
- The total value of auto finance at all banks will not exceed Rs. 3 million per person.
- In total, your repayments ought to not surpass 40% of net pay.
What Is Still Only a Proposal?
Tenure is also proposed to be brought back to 7 years in the draft Auto Policy 2026-31 and minimum payment reduced in that policy to 15%. It’s a suggestion, not a requirement. Current limits remain in place until it becomes one.
Options If You Want an Imported Car
- Pay cash or with your own money.
- Talk about a used car purchased locally, which banks can finance.
- Overseas Pakistanis can check out Roshan Digital Account schemes. They have separate rules.
Conclusion
Imported used cars are getting easier to buy, but not easier to finance. Bank financing is still limited to local vehicles. Be aware of the range and budget plan around it.
