The government plans to limit car booking advances to 20 percent and introduce measures to curb the widespread practice of “On Money” under the proposed five-year Auto Policy 2026-31, according to the draft policy seen by RBN.

The proposed framework would also protect the vehicle price agreed with buyers at the time of booking, preventing manufacturers from increasing the price after an order has been placed.

The draft includes several measures aimed at strengthening consumer protection and improving transparency in the automotive sector.

It also proposes tighter controls on used vehicle imports, including requirements for third-party inspections and adequate after-sales services.

The policy seeks to promote smaller and more affordable urban mobility options by recognizing L6 and L7 vehicles as alternatives to motorcycles. The government also plans to encourage greater domestic production of these vehicles.

From July 2027, automobile manufacturers would be required to meet phased and verifiable Minimum Domestic Value Addition Requirements.

The draft also proposes the adoption of 45 additional UNECE vehicle safety regulations to bring vehicle safety standards closer to international benchmarks.

Another proposed measure is the establishment of the Pakistan Automotive Testing Institute to strengthen vehicle testing and certification capabilities.

The Auto Policy 2026-31 is still being finalized by the government and has not yet received final approval.