Cars prices in Pakistan are touching the roof and of you’ve been holding off on buying a new car in Pakistan, the government’s proposed Auto Policy 2026–31 might finally give your wallet some much-needed breathing room.

By planning to scrap the 2.5% Federal Excise Duty (FED) on locally assembled and imported cars under 1,000cc, the market could soon see some noticeable price drops.

For everyday buyers, the Suzuki Alto is the biggest story. Depending on the variant, the Alto could see a price cut of Rs 70,000 to Rs 81,000, bringing the base VXR model down to around Rs 2.92 million. If you’re eyeing a Suzuki Cultus, you might save over Rs 106,000, while the Suzuki Every could drop by about Rs 72,000. For a slightly more premium ride, the Kia Stonic stands to shed the biggest chunk of its price tag, potentially dropping anywhere from Rs 1.30 lakh to Rs 1.45 lakh.

Import enthusiasts also have a reason to be optimistic. Popular Japanese models like the Daihatsu Mira, Toyota Passo, and Honda N-One could become more affordable if they meet the specific engine and customs criteria. To sweeten the deal for local manufacturers, the policy also plans to slash duties on imported parts for these smaller cars from 46% down to 30%.

Just don’t head to the dealership quite yet. While the Prime Minister has approved the draft in principle, it still has to clear final bureaucratic hurdles and IMF-related reviews. Most importantly, it will ultimately be up to automakers like Pak Suzuki and Lucky Motor Corporation to actually pass these tax savings down to the consumer once the final legal notifications are issued.