If you have read our post on the key highlights of the federal budget 2021-22, which was announced in the National Assembly on June 11, 2021, you would know that the government of Pakistan had already announced many taxes and duties revisions to take some financial burden off of the general public.
One of the most noteworthy initiatives in this regard was the slashing of duties and taxes on small vehicles up to 850cc and the announcement of a new auto policy that exempts value-added taxes on the import of electric vehicles.
Another major development that is making headlines these days is the announcement of the federal government to launch a subsidied car financing scheme in Pakistan under the newly introduced policy. Like other state-run schemes, this government-proposed auto financing facility will be offered at low markup rates of up to 5-6%.
In this blog, we are going to discuss every important detail of this upcoming government’s flagship auto financing scheme in Pakistan.
What Do the Officials Say About the New Car Financing Scheme in Pakistan?
According to a recent article published by a leading news publication, the Ministry of Industries and Production, as well as the federal government, are quite positive about the subsidised car financing facility. It is expected that this initiative will not only facilitate the masses for whom affording a car has now become nearly impossible but also boost sales of the automotive sector.
The official statement mentions, “The rate being proposed for small cars (up to 1000 cc) would be around 5% while 6% is being suggested for cars of more than 1000 cc.”
“The facility could boost sales in the auto industry which ultimately create business and employment opportunities,” the statement further added.
Which Cars Will Be Available Under Govt’s Financing Scheme?
According to the statement above, cars up to 1000 cc will be available with subsidised interest rates of around 5%, whereas large vehicles that are above 1000 cc will have a markup rate of 6% under the government’s car financing scheme in Pakistan.
Govt Introduces ‘Meri Gari Scheme’ to Reduce Taxes and Duties on Small Cars
Along with the announcement of a car financing scheme, the government of Pakistan has also heavily slashed taxes and duties on cars up to 850 cc under the ‘Meri Gari Scheme’ initiative. The general sales tax on small cars has been reduced to 12.5% from 17%.
These vehicles have also been exempted from the federal excise duty and value-added taxes. Companies that are manufacturing small vehicles in Pakistan will be eligible to avail of these concessions introduced under the government’s very own Meri Gari Scheme.
New Incentives Expected for Hybrid Cars in the Upcoming Auto Policy (2021-26)
Key stakeholders of the auto industry have also reportedly agreed to introduce special incentives for hybrid vehicles in the upcoming auto policy for the next five years. Also, the parts that make hybrid cars partially electric are also expected to get incentives introduced in the new Electric Vehicle (EV) policy.
Currently, the new EV policy is also in the works, which is expected to be completed and released publicly later in July 2021. This has been confirmed by an official of the Engineering Development Board (EDB).
More About the Options of Car Financing Currently Available in Pakistan
There are many financial institutions that are currently offering car financing services in Pakistan. You can buy almost any popular new or used car in instalments in Pakistan.
For your reference, here we have prepared a table for you mentioning some popular brand-new cars that are available with the lowest monthly instalment plans. Take a look!
|Car||Down Payment||Intial Deposit (PKR)||Loan Tenure||Monthly Instalment (PKR)|
|Suzuki Alto VX||15%||225,342||7 years||19,819|
|Suzuki Cultus VXL||15%||365,652||7 years||32,634|
|Toyota Yaris GLI (1.3)||15%||468,972||7 years||42,071|
|Honda City 1.3 i-VTEC||15%||460,692||7 years||41,315|
Note: For all the latest updates on the latest auto loan rates in Pakistan, read this blog.
This was everything you needed to know about the soon-to-be-launched car financing scheme in Pakistan by the federal government and other vehicle financing facilities offered by private banking institutions; it’s time for us to wrap up.
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