Auto Loans Rise to Rs. 318 Billion in November

Outstanding auto loans in Pakistan reached Rs318 billion in November, up from Rs315.4 billion in October, marking the 12th consecutive month of growth, according to State Bank of Pakistan (SBP) data.

Despite this gradual recovery, the market remains below 2022 levels, when annual car sales hit 240,000 units and auto financing peaked at Rs368 billion.

The recent improvement is largely attributed to the sharp reduction in the policy rate, which fell from 22% in June 2024 to 11% by May.

The SBP’s latest 50 basis points cut on December 15 is expected to further encourage financing activity.

However, the sector still faces challenges. The Rs3 million cap on auto loans restricts buyers’ financing options.

Auto sector experts suggest increasing the limit to at least Rs6 million to match current market prices and support demand.

Topline Securities CEO Mohammed Sohail highlighted that economic stability, new car models, and further rate cuts will continue to boost auto sales and auto loans.

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Reflecting this momentum, auto sales during the first five months of FY26 surged 48% to 75,042 units from 50,856 units in the same period last year, driven by low interest rates, new market entrants, and improving economic sentiment.