Govt Plans 7-Year Car Installment Scheme With Loans Up to Rs. 10 Million

The federal government is reviewing new car financing reforms under the draft Auto Industry Development & Export Policy 2026–31, aimed at making vehicle ownership easier for buyers in Pakistan.

According to reports, the proposals include extending auto financing tenure up to 7 years, reducing minimum down payment to 15 percent, and allowing car loans of up to Rs. 10 million for eligible locally manufactured vehicles.

The purpose of these reforms is to revive car financing demand after high interest rates, strict lending rules, and rising vehicle prices reduced purchasing power in the country.

The draft policy also includes consumer protection measures such as fixed booking prices, penalties for delayed delivery, a limit on advance booking payments, and warranty responsibility for manufacturers or authorized importers.

For the auto industry, the policy targets annual vehicle production of over 500,000 units by 2031, auto exports of $1 billion, 30 percent new energy vehicle share, and thousands of EV charging stations across the country.

However, these proposals are not final yet. They will be implemented only after regulatory review, banking sector consultation, and approval from relevant government forums.