Own Money – Open Blackmailing by Car Dealers in Pakistan

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Own money is an illegal selling practice by car dealers in Pakistan to exploit buyers. When asked from dealers why they practice and propagate such lousy notion in the car market, they say that they don’t have any other area in which they invest their money, so that is why they book cars ahead of their production and earn huge profit. Furthermore, the car dealers also charge customers own money by saying that the money is going to the company, which according to The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) former chairman Syed Nabeel Hashmi, who was talking to the press, is utterly wrong.

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syed-nabeel-hashmi
Syed Nabeel Hashmi

Mr. Hashmi further said that car dealers in Pakistan earn additional Rs.150, 000 to Rs.250, 000 money from own money exploitation on each vehicle they sell to the consumer. This additional sum which they have earned is excluded from the profit margin which the automobile manufacturers have given to dealers. On some cars, like the Toyota Fortuner, the own can go up as high as Rs6 lacs.

The other reason why this malpractice is still lingering is due to the long delivery time, which the company offers to its consumers. Some customers have to wait for months to drive their car, so that is why to get the car immediately and on the spot consumers pay own money to car dealers fully knowing that they are being exploited by the dealers.

Customers blame auto manufacturing companies for the expansion of the own money practice; they say that auto manufacturers should develop a fast way to deliver cars so that this malicious practice would end in the country.
On the other hand, the government has devised a strategy to curb the own money practice.

  •  Introduced a tax on the transfer of vehicle registration
  •  The record of the ID of all buyers should be recorded
  •  Non-tax filers to be punished with extra with-holding tax

The government is going all out against the illegal scheme. However, the strategy is still not working because consumers are still buying cars while paying own money to the car dealers in Pakistan. So if consumers want to filter out this dubious practice, they should cooperate with the government with full commitment.

Government’s new auto policy 2016-21 would also help in eradicating own money practice as it will attract foreign auto manufacturers to function in Pakistan, which will fulfill the demand of local consumer and start a more healthy competition between automobile manufacturers.

Aside from government, auto manufacturers have also taken few steps to eradicate own money practice by refusing to book multiple cars on a single CNIC. Most of them are already working on full capacity. There is already so much they can do at least at this point.

But we still have a long way to go. The government has taken some solid steps in order to curb this extrotion but maybe it needs to be a bit more proactive and aggressively campaign against such dealerships.

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10 Comments
  1. Fahd Riaz Ali says

    The Only solution to this problem is for car companies to deliver cars quickly and not force the customer to go to dealers but then again the auto industry in Pakistan is the among the most exploitative in the world. 28 lacs for a honda civic??? GO TO HELL

  2. Masroor Gilani says

    For non-filers WHT is too low it should be at least 100,000 on cars from 0 cc to 800 cc, 300,000 from 801 cc to 1299 cc, 500,000 on 1300 to 1598 cc and 700,000 from 1600 to 1799 cc. Then only genuine buyer will become filer and then buy car (filers number will rise, good for documentation) and if filers will do own business are their car purchases in a calendar year will be in the eyes of FBR and then they would be further taxed. Only higher taxes on non-filer would discourage own business, because max 150,000 WHT on an 1800 cc car is not deterring anyone.

  3. Suhaib Aamir says

    In an illegal country you want legal stuff. Come on bro let us be realistic.
    Pakistan is the only country which has the costliest cars sold in it. Look at the illegality in the competition. The Japanese brands are holding the market and are not letting any other manufacturer enter the market. These car dealers are earning a very small chunk. If you want to solve the illegality solve it from the perspective of big crocodiles.

  4. Ashraf says

    Dear all. increadibg tax is not a solution as it already high for filers and non filers. Only solution is to give cars within reasonable time. As we have fewer choices like Honda Toyota and Suzuki so each cpmpany within its production give long wait time. Although Quality of cars is not good even with this long waiting time but if possible they can decrease car delivery time to avoid own. Another option is to allow other companies like WW and others to start manufacturing here. People pay own at their choice and most people here have enough to pay. We all pay hughe taxes in daily life and never claim for any benefit. Own depends on availability of choice car. Demand and shortage of cars creats chance for own. Why there is no own for BRV whereas Civic is selling on own.

  5. Bilal says

    We are not fools, all of us know that this game is played under the umbrella of concerned ministries, and they takes out their due shares.

  6. Abdul Khaliq Badani says

    Transfer of locally manufactured unregistered cars should NOT be allowed. There are other solutions too, but those who matter don’t want to resolve this issue for obvious reasons.
    Nothing is impossible if authorities really want to do it.

  7. farok sayer says

    At the time of Musharraf , 5 year old cars were allowed to be imported , but the “” democratically elected”” government of mr 10% came to power the car companies stopped the import of cars.Now the poor consumer is being fleeced by the car companies Toyota, suzuki and Honda who are taking advance money and delivering the car after 6 months.Pakistan is the only country in the world where the customer waits 6 months for a car.The corrupt governments know this full well and are also making money while the poor consumer is suffering.Government should penalize the people doing this blackmarketing or provide public transport instead of planting 500,000 trees.

  8. Pak Patriot . says

    But wot abt those living abroad,I pay taxes in my country like 36% of my income then i send money to Pakistan thru banking chnl but still my status is nonfiler which is unfair there shud be policy for us too i can show i ve paid tax in my country but i ve to visit Pk then buying a car once a year and i ve to pay own with non filer tax which is very unfair while i send remtnce to Pk,which shud be appreciated nt to punish us…There shud be a system where they can see Ok this person send money frm abroad he can be excluded frm non -filer status …forexample….????

  9. Najam Zahoor says

    What do you mean by illegal country? You are part of this country and because of you people this kind of things are practiced in Pakistan. Respect your country and try to show its positive side to the world by your comments and by your act. dont blame your country blame your self or people who are doing this king of stuff….. Stand for your country. Please

  10. Someone says

    For people like me who would buy maybe only one or two new cars in their whole lifespan, and maybe one apartment at most, there is no reason to go through the hassle, time and effort of becoming a filer just to avoid a one-time 100,000 or even less tax for non-filers. But if the W.H tax becomes much higher then it would just add to the misery.
    Life is lots hectic as it is, let’s not make it more painful.

    There are countries in this world where there is no taxation/filing yet there no own-money extortion either.

  11. Guest says

    For non-resident Pakistani there is no income tax on overseas income.
    And the W.H tax is not for the person actually earning the money as the income tax should be cut at source.
    If you do not have an NTN you’ll e.g face 0.6% W.H tax on each bank transaction of 50,000 or more. And if you have NTN but you are still non-filer (means you are not on Active Taxpayers List) you still have 0.3% penalty. And finally if you are on the most recent ATL then you are exempt from W.H tax.

    Since your overseas income is exempt from tax, you can just become a “filer” which just means you declare your income and pay no tax, then you’ll have your name on ATL. And you can file the return online on FBR website so you don’t even need to visit Pakistan to do it. To make it even less time-consuming, a tax consultant can do it for you.

    E.g Nawaz Sharif’s case was initially simple. It was not about tax evasion, it was just that why didn’t he declare his overseas income. (Afterwards the case had become much more complex).

    This W.H tax problem is faced by many people. There are so many foreign expats (Irani. Arab. Chinese, Western) living in Pakistan too. And so many tourists also and they are also subject to many types of taxes such as W.H tax when loading balance in mobile phone etc.

  12. aamir durrani says

    Even Honda City Sales at Kalma Chowk Lahore is doing the same. We got our City in May after giving the sales woman Rs. 160,000!!

  13. Suhaib Aamir says

    Awww bubbly. You are so positive, hopeful and ethical. I wish I was like you. I wish I had a good brought up like you. I wish I had good education like you. I wish I never committed fraud and sins like you. I am sorry bubbly mummy daddy chap.
    For me Pakistan is a screwed up country who sold its balls to Americans 1st during the Afghan war and then Pakistan was totally castrated after 9/11 again by USA when USA threatened them that you are either with us or we will bombard you to the stone age. You want me to have respect for such a country where Raymond Davis can kill and then be freed in a broad day light. You want me to have respect for a country who after the Britishers rule till now havent developed a single railway tunnel. A country where Liaqut Ali Khan can be killed, Zulfiqar Bhutto hanged, Benazir Bhutto assassinated. I cant respect a country where there is Hathora group then now the Chaku group, haha and no criminal of any of the above crimes till today have been caught. I cant respect a country which is completely screwed up from all directions. I cant respect a country in which in just last two weeks 2 women gave birth to their babies on the stairs and floors of the hospitals in front of everyone (What a shame bro). I cant respect a country where Dengue is not eradicated rather than politicized and competed on that in Punjab or KP how many died of it rather than how many were saved from it.

  14. Najam Zahoor says

    Clapping for you sir….. Every other country has some kind of issues including rape murder robbery etc etc. its just because of our media or people like you we have move negative image and with that negative thinking. You have a country ask those who don’t have. issues are every where and sorry to say jaisy insan waisy huqmaran.first change your self your surrounding then hopefully some day we have better Pakistan Inshallah. stay blessed.

  15. Masroor Gilani says

    I think the best solution is to exempt expat Pakistanis from WHT as they are already doing country a favour by sending remittances in foreign exchange.

  16. Bilal says

    This is probably one of the worst document I ve come across in near past . I mean , some one born , fed and brought up here in Pakistan has the guts to ooz such a crap against this mother land …. shame on such an idiot who has such high degree of wisdom. I wish you were born some where close to Delhi and then realize what’s the worth of this country.
    Regards

  17. Mohammed Aziz says

    No body forced you to pay 160000 if buyers stopped paying this on money then dealers would be forced to stop the on money cheating as dealers will have to many cars in stock and will be forced to move the cars at factory prices ràther this on money cheating .
    Power is in the hand of the buyers stop paying this on money shit and dealer will have no choice but to sell at factory prices .
    Example what is the fucking dealer going to do when he 100 or 200 cars in stock and no buyer is willing to pay on money .
    Dealer will be forced to sell at factory prices otherwise dealer has stock that no one is willing buy

  18. Shahzad Amin says

    Customers cannot stop this shit, they need vehicle on any cost. Once he pays a lot of money then he has to wait for 6 to 8 months to get the car. Just Govt can stop this robbery. It should make a policy to restrict the car companies to provide vehicles to the customers in time without paying any additional cost

  19. Mohammed Aziz says

    The Government is run by fucking choors and you think these choors are going to stop other choors from robbing the ordinary people, to which the answer is no.

    Power is the hand of the buyer if the buyer has paentice ( sabar ). If the buyer who has no sabar then he is going to pay on money he should not complain about paying on money.l have no smpathy these buyers. Power is in the hand of the buyer

  20. Malik Samar Ahmad says

    This can be restricted only when governments put ban on re sales same vehicle upto 1 or 2 years , this malapractice will finish automatically. What Government has taken measures has nothing to do to curb this…..

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