How to Buy a New Car on Installments in Pakistan (2026 Guide): Down Payment, Mark-up Rates and Bank Plans
Buying a new car in Pakistan is not cheap anymore. Most locally assembled sedans and SUVs now cost over Rs 3 million, and popular family cars easily touch Rs 6 to 8 million. For most buyers, paying the full price in one go is not possible. That is why bank car financing is the most common way to buy a new car on installments in Pakistan. This guide explains how car financing works in 2026, how much down payment you need, what mark-up rates banks charge, which documents are required, and how to get the best deal. How Car Financing Works in Pakistan When you finance a car, the bank pays the car dealer on your behalf, and you repay the bank in fixed monthly installments. Standard repayment tenure is 1 to 5 years. Overseas Pakistanis can get up to 7 years under the State Bank's Roshan Apni Car scheme. There are two types of car financing in Pakistan: Conventional car loans — an interest-based loan where the mark-up rate is linked to KIBOR (Karachi Interbank Offered Rate). I...