Own Money Continues to Enrage Car Buyers Despite New Auto Policy

Outraged car buyers have been taking to various social media forums to share their concerns as the irksome culture of ‘own money’ continues by numerous dealers across Pakistan.

Brand new vehicles that have been driven for under 100 km are currently listed for sale on various online marketplaces for hundreds of thousands of rupees over the Manufacturer’s Suggested Retail Price (MSRP) as well as what could be the on-road price of the vehicles, making them even more expensive than they already are for buyers.



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The government of Punjab and the Islamabad capital authorities had decided to impose withholding tax on car buyers earlier this year. Accordingly, if a person purchases a vehicle within Punjab or Islamabad and decides to sell it within three months of the purchase, he/she will have to pay a certain amount of tax or the else authorities will be authorized to seize the vehicle.

The tax imposed on vehicles is on an engine-category basis. In the aforementioned case, the owner will have to pay the following amounts as a tax:

  • Rs. 50,000 for vehicles with an engine displacement up to 1000cc
  • Rs. 100,000 for vehicles with an engine displacement up to 2000cc
  • Rs. 200,000 for vehicles with an engine displacement above 2000cc

Additionally, the government has also decided as part of the new auto policy to impose a fine on automakers if they fail to deliver vehicles within 60 days of booking. In case of delays beyond the initial deadline, the automakers will have to pay a penalty of three percent plus the Karachi Interbank Offered Rate (KIBOR).


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The ruling has been enacted to curb the menace of ‘own money’ but the issue continues to persist in the Pakistani car market because, reportedly, there are several gaps in the policies pertaining to the buying and selling of cars in the country.

The government must address the issue urgently to create a healthy business atmosphere in the automotive industry, to ensure its growth, and to offer relief to car buyers.

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