The cost of brand-new cars in Pakistan has recently risen beyond the means of many people. In our nation, mass-market vehicles, which are common modes of mobility for the general middle class, are priced like luxury vehicles.
Due to the existence of scalpers in the market, the sales may appear to be strong on paper, but new automobile registrations have already begun to show symptoms of gloom. Local assemblers had previously projected a 30% drop in sales for FY22–23, but given the current state of affairs, the sales hit will be far more than expected. Sales of automobiles assembled locally, including those sold to non-PAMA members, had already decreased by 59% month over month as of July 2022. Sales for August, which will be disclosed on September 12th, are anticipated to be considerably lower than those for July.
In addition to the rise in withholding tax on filers and non-filers, the 1% capital value tax on vehicles above 1,300cc, rigorous auto finance regulations to reduce demand and high interest rates are all blamed for the fall in sales. In addition, growing inflation, increased taxes on the salaried class, unfair invoicing extortion under the guise of fuel adjustment fees, and rising commodity costs have caused consumers to limit their expenditure on non-essential things like new cars.
Even auto financing is no longer feasible in light of the minimum necessary down payment rise from 15% to 30%, the maximum auto loan term reduction from 7 to 5 years, and the maximum debt-to-income ratio decline from 50 to 40%. A modest car like the Alto would cost around Rs 29,000 per month in monthly payments (EMI), while the Cultus VXL would cost nearly Rs 40,000 per month.
The financing term for vehicles with engines larger than 1,000cc may no longer be 5 years; it is now just 3 years. This indicates that the EMI for the City Aspire will be close to Rs 90,000, the EMI for the Corolla Altis Grande would be close to Rs 125,000, and the EMI for the Civic RS will be close to Rs 180,000 a month.
Even new automobiles with fuel-efficient engines, like the 1.2L Peugeot 2008, will cost you about Rs 145,000 in EMI. The comparatively "cheap" choices, such the Honda City 1.2L, would cost you about Rs 87,000 per month over the course of three years, while the Kia Stonic 1.4L will cost you Rs 120,000 per month in the form of monthly installments. With EMIs this exorbitant, it goes without saying that no sensible individual with a wage today can obtain vehicle finance.
What then is the remedy? Simple: Love your current vehicle! It's getting more and harder to get a used automobile within a reasonable budget as market prices for used cars skyrocket. Million dollar asking prices are made for secondhand autos that are decades old. Even if you were to sell your old automobile for a fair price, the money you receive wouldn't be enough to pay for new car since you would need to add an insane quantity of money to do so. However, if you are a buyer, spending millions of dollars just to purchase a secondhand automobile that is far too old is nothing short of a nightmare.
When you have the money to upgrade, buying a new automobile only makes sense if it provides you with something worthwhile, whether it is better equipment, safety, usefulness, or luxury. However, especially in these difficult economic times, selling your current automobile and then purchasing the identical item in a different model year just doesn't make sense.
Everyone is struggling to make ends meet, so there's no need to junk a good-running automobile simply because it looks worn out. If you follow the various maintenance tips available, you may not need to replace your current vehicle as regularly. Therefore, unless things return to normal, retaining your current automobile may be a safer option than throwing money away by purchasing a second used car.