Auto Financing in Pakistan Hits Rs. 315 Billion in October

Auto financing in Pakistan continues its strong growth, reaching Rs. 315.4 billion by October 2025, up from Rs. 305 billion in September, according to the State Bank of Pakistan (SBP) and Arif Habib Limited.

This represents a 33.7% increase compared to last year and a 3.5% rise month-on-month. The sector has now expanded for 11 months consecutively.

Experts say the growth is largely driven by lower interest rates after the central bank reduced its policy rate to 11% in June 2024 from 22% earlier.

This shift has boosted demand for auto loans, bringing them closer to the record Rs. 368 billion reached in June 2023.

Consumer interest in small cars, especially the Suzuki Alto 660cc and imported used vehicles, is rising, while new car launches by both local and international assemblers are keeping the market active.

Banks and car manufacturers are offering attractive financing packages with rates below 10%, further encouraging buyers.

However, some challenges remain. The current Rs. 3 million cap on auto loans, 30% down payment requirement, and limited loan tenures five years for cars up to 1,000cc and three years for smaller vehicles are restricting higher-end purchases.

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Analysts predict that demand will continue to grow as long as interest rates stay low and small, affordable cars remain popular.