How to Terminate a Hire Purchase Agreement on Your Car in Punjab After the Last Instalment
Paid off your car loan in Punjab? Excise lists four papers to terminate the hire purchase agreement: your application, a bank NOC, a CNIC copy and the book.
Short answer: After your last instalment, ask the bank for a no objection certificate (NOC). Then give Punjab Excise a plain paper application, the NOC, a copy of your CNIC and the original registration book with token tax paid up to date. Excise calls this termination of the hire purchase agreement.
You make the last payment on your car loan, and the bank says you are free. Then you try to sell the car, and a buyer asks if the bank still has a claim on it. A record that says yes can stop a sale.
We read the Punjab Excise, Taxation and Narcotics Control Department page on registration and post-registration transactions on 14 October 2026. We did not terminate an agreement ourselves, so the steps below follow the department's list.
A hire purchase agreement keeps the bank's claim on your car
In a hire purchase agreement, the bank pays for the car and you repay in instalments. In the excise page's words, you are the lessee and the bank is the lessor. The bank's claim stays on the vehicle record until the agreement is ended.
The excise department names the step that ends it: termination of the hire purchase agreement. We could not find on the page which exact entry is removed from the record. Ask the office to show you the vehicle record after it is done.
Do not treat the bank's final receipt as enough. The department lists its own papers, and a buyer or a new lender will look for the excise record, not your receipt.
Excise lists four papers for the termination
The department lists an application on plain paper from the lessee, a NOC or clearance certificate from the lessor, a photocopy of the applicant's CNIC, and the original registration certificate showing up-to-date token tax. Vehicles under the File Return Scheme also need the original registration file.
| Paper | Detail |
|---|---|
| Application | On plain paper, from you as the lessee |
| NOC or clearance certificate | From the bank, which is the lessor |
| CNIC | Photocopy of the applicant's |
| Registration certificate | Original, with token tax paid up to date |
| Registration file | Original, if the vehicle is under the File Return Scheme |
The page lists no fee for this step. That does not prove it is free, so ask the excise office before you go. Your bank may also charge for the NOC, and we have not checked what it charges.
Ask the bank for the NOC as soon as you finish paying
The NOC, or clearance certificate, is a letter from the bank saying you have paid in full and it has no objection to ending the agreement. Ask for it in writing the week you make the last payment, and keep a copy.
Check the letter before you leave the branch. The name, vehicle number, engine number and chassis number must match the registration book. A single wrong digit can send you back to the bank.
If the bank delays, escalate in writing and keep dates. For your wider rights on loans, see what the State Bank says in fixed rate loans and early repayment rights in Pakistan.
Clear token tax before you apply
The department asks for the original registration certificate showing up-to-date payment of token tax. If you owe any, pay it first and carry the proof. Paying online is quick, and the steps are in the online token tax guide.
- Pay the last instalment and ask the bank for a written NOC.
- Check that the NOC matches the vehicle details in your registration book.
- Pay any token tax due, and keep the proof.
- Write a plain paper application to the excise office.
- Attach the NOC, a copy of your CNIC and the original registration book, and hand them in.
If your registration book is lost, you cannot complete the step until you replace it. See how to get a duplicate registration book in Punjab first.
Get an ownership certificate if you need proof
The same excise page lists an ownership certificate. It needs an application from the recorded owner on plain paper, a copy of the CNIC, the registration file if applicable, and the registration certificate with token tax paid. It may help when a buyer or a lender wants proof.
We did not read what the certificate costs or how long it takes. If you plan to sell after you terminate the agreement, the car ownership transfer guide for Punjab shows the next stage.
Common questions
What is a hire purchase agreement on a car?
It is a financing deal where the bank pays for the car and you repay in instalments. The bank stays on the record as the lessor until the agreement ends.
What does Punjab Excise need to terminate a hire purchase agreement?
A plain paper application from you, a bank NOC, a CNIC copy and the original registration book with token tax paid. File Return vehicles also need the registration file.
Is there a fee to terminate a hire purchase agreement?
The excise page lists none. Ask the office to confirm, and ask your bank what it charges for the NOC.
Can I sell my car before the agreement is terminated?
It is risky, because the bank's claim is still on the record. Terminate first, then transfer.
Who gives the NOC?
The bank or leasing company that financed the car, which the page calls the lessor.
How we verified this
What we checked, where we read it, and what we could not confirm.
Last checked on 14 October 2026, Pakistan time. We read the Punjab Excise page on motor vehicle registration and post-registration transactions. It lists no fee and no time limit for this step. We did not complete a termination. Confirm the papers and any charge with your district excise office and your bank.
About the author
Public Services and Education Journalist
Fajr Riaz is a journalist and content writer at Pakistan Era, based in Lahore. She covers the questions people meet in everyday life in Pakistan: how a public service works, what a change in the rules means, and where to find a reliable answer.
