Car Financing in Pakistan: From Tough Times to Easier Access in 2025
Owning a car in Pakistan has long been a dream for many middle-class families, but economic ups and downs have made it challenging. But car financing plays a key role in making vehicles accessible.
In recent years, this sector has seen dramatic shifts, from a painful decline during high-interest periods to a strong recovery in 2025.
The Tough Times for Car Financing From 2022 to 2023
From 2022 to 2023, financing a car became extremely difficult.
Due to the county’s worsening, unstable economy after the pandemic, the policy rate increased sharply. Which peaked at 22% by mid 2023
This led monthly instalments to skyrocket, discouraging buyers, and caused outstanding auto loans to shrink continuously from a high of Rs 368 billion in June 2022 to around Rs 235 billion by late 2023 and early 2024.
Fast forward to 2025
Things have changed significantly. With aggressive monetary easing thanks to economic stabilisation, the SBP slashed rates from 22% in June 2024 to 11% by mid-2025, then surprised markets with a 50-basis-point cut to 10.5% in December 2025.
This has made car financing much easier and more affordable compared to the previous year’s trend, reviving consumer demand and boosting the auto sector.
source: tradingeconomics.com
The 2025 Recovery Trend
2025 marked a robust rebound, with auto financing climbing steadily:
- November 2025: Rs 318.03 billion (+0.83% MoM from October’s Rs 315.4 billion; +35.54% YoY from Rs 234-235 billion in November 2024).
- This represented the 12th consecutive month of growth, though still below the 2022 peak.
- Early estimates suggest the momentum continued into December, supported by the fresh rate cut.
| Period/Month | Automobile financing (Rs Billion) | Key Change |
| June 2022 (Peak) | 368 | Pre-decline high |
| Late 2023/Early 2024 (Low during/after PDM era) | ~235 | Prolonged decline under high rates |
| October 2025 | 315.4 | Strong monthly gains |
| November 2025 | 318.03 | +35.54% YoY |
The growth correlated with surging auto sales – passenger car volumes rose significantly, driven by affordable hybrids and new models from Chinese brands like BYD and Chery.
Looking Ahead to 2026
With rates at a multi-year low and economic indicators positive, 2026 could see sustained growth in car financing, potentially pushing volumes closer to pre-2022 levels. New policies favouring EVs and competition may further ease access, but vigilance on inflation and imports is needed.
The contrast is clear! This recovery not only boosts the auto industry but signals broader economic optimism for Pakistani consumers. If stability holds, owning a car could become even more achievable in the year ahead.
Pro Tip: How to Fast-Track Your Car Finance with PakWheels Car Finance Service
With car financing stabilising and interest rates hitting their lowest point in three years, there has never been a better time to finance your vehicle.
The traditional process can be a major hurdle. Taking time off work to visit branches and paperwork is a headache no working person wants, and waiting weeks or even months for approval can be frustrating.
PakWheels is here to solve that. We bring the bank to you through our exclusive partnerships with:
- Faysal Bank
- MCB and MCB Islamic Bank
- Dubai Islamic Bank
- Al Baraka Bank
- Bank Alfalah
- Bank of Punjab
You don’t even need to leave your home. Simply use our Car Loan Calculator to get an instant estimate for your desired new or used car, breaking down your monthly EMI, down payment, interest rate and the first-time payment. Once you are happy with the numbers, just fill out the contact details.
Our representative will call you within 24 hours to guide you through the next steps. We handle the legwork, and if all documentation is in order, we can get your financing approved from your chosen bank within just one week, no commission and no hidden charges, everything for free of cost from our side.
Want more expert insights, car reviews, and the latest news? Visit PakWheels Blog for all your automotive updates, both local and international, in one place!
