100% Booking Amount will End On-Money Culture- Says IMC Chief

The menace of on-money/ premium/ own has been a curse for the local auto industry as well as the auto consumers since long. Government during different periods have made futile attempts to eliminate the malpractice of bulk-bookings & charging higher amount from potential customers for early deliveries of vehicles. However no concrete measure has been initiated ever, and the market still is dominated by a huge number of investors/ hoarders who tend to grab a major chunk of new cars before they can reach the deserving customers.

According to the research by Pakistan Institute of Development Economics (PIDE), the automobile sector of Pakistan has made undocumented transactions worth Rs 150 billion to Rs 170 billion during last 5 years under the head of additional charges, also known as own/ premium, paid to the car dealers to get an immediate delivery. As per this research, up to 90% of passenger vehicles in Pakistan are sold against premium/ on money.

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Government had imposed penalties of 3% plus Kibor on car companies who fail to deliver their automobiles within 60 days after taking the booking order, as well as an up to Rs 200,000 WHT on those who sell newly purchased local assembled vehicles within three months of delivery. However these measures are fruitless since no investor registers & sells the vehicle within 90 days, in fact the game is done on the first booking of ‘unregistered’ vehicles and it is usually the buyers who has already paid the own-money, to be the first to register a new vehicle.


According to the CEO of Indus Motor Company (IMC) Ali Asghar Jamali, the government’s restriction to collect a maximum of 20% on booking makes a business case for investors. Jamali says, investors can book 5 cars at a price of one, which chokes supply and increases delivery time, giving margin to investors to charge high own-money. If car companies are allowed to charge full payment at the time of booking it would make the industry unattractive for investors. Government can then penalize assemblers if they do not deliver a car in three months, he added.

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