Islamabad, July 18, 2025: Pakistan’s auto financing sector saw an upward momentum in June, with outstanding car loans climbing to Rs276.6 billion, from Rs271.2 billion in May. According to the State Bank of Pakistan (SBP) data, this is the seventh straight month Pakistan experience such growth.
However, the current figures are still below the all time high of Rs. 368 billion recorded in June 2022.
A major factor behind this continuous rise is decline in interest rates, which have dropped from 22% to 11% since June 2024, significantly boosting consumer demand for auto loans. However, a recent hike in car prices, caused by the implementation of the NEV adoption levy from July 1, could potentially affect future financing activity.
Although financing has improved, auto loan growth is still limited because of the current Rs3 million cap on car loans. Industry players have urged the SBP to raise the cap to Rs6 million to provide more low- and middle-income consumers with access to financing options.
Car leasing is still a challenge for many due to strict rules, like shorter repayment time and large down payment requirements.
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Sales of vehicles—including cars, pickups, SUVs, and vans—jumped by 43% compared to last year, hitting 148,023 units in FY25, up from 103,829 units in FY24. This growth was helped by more vehicle choices, lower inflation, and better loan conditions.
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Topline Securities expects that total vehicle sales in FY25—including those from PAMA and non-PAMA members and imported cars—will go beyond 217,000 units, showing a 31% rise from last year. Still, this is lower than the 330,000–350,000 units sold in FY18.
For FY26 and FY27, the company predicts a rise of 14% and 13% in sales, reaching 248,000 and 280,000 units. Even so, these numbers would still be 15–20% lower than the all-time high in FY18.
