Second-hand cars could fetch more than new ones in Pakistan
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Depreciating rupee is a boon for car owners in Pakistan but a bane for those who want to buy one.
The Pakistan automobile market a very unique one compared to most countries in the world including India because a second-hand car here can actually fetch you a higher price than what one bought it for.
Take for example Omar who imported his 2007 Honda Accord from Japan in 2008 for about PKR 17 lakh.
Surprisingly, even after five years of use, people are ready to buy his car for PKR 22 lakh. A brand new Honda Accord costs a whopping PKR 1.06 crore ex-showroom here.
For most car owners in Pakistan, vehicles can actually turn out to be an investment.
Daud, a taxi driver, bought his 1990 Suzuki Mehran (India's 800) in 2000 for PKR 2.5 lakh.
The original owner had bought this car in 1990 for just PKR 1.5 lakh.
With alloy wheels and sporty tyres besides other modifications, the car remains in very good condition and will fetch him nearly PKR 5 lakh at present despite being 25 years old.
The ex-showroom price for a brand new Mehran is about PKR 6.5 lakh but taxi driver prefer the older models because they claim the engine is better than the Euro 11-compliant new ones.
"The drastic fluctuations in foreign exchange rate have had a cascading effect on the car prices. If I use to pay USD 5000 to import a second-hand car from Japan, the same would cost me an extra USD 3,000 now," explains Zahid, a car dealer who supplies refurbished cars for various embassies.
Over the months, Pakistani rupee has depreciated against the dollar.
In August, one US dollar used to fetch about PKR 101 but it went up to PKR 110 and now hovers around 107. Pakistan is a huge market for second-hand imported cars, usually from Japan.