Car Financing in Pakistan Jumps 7.5% by March 2025

Wajahat

18 Apr 2025

151

Car Financing in Pakistan Jumps 7.5% by March 2025

Pakistan’s auto financing sector is experiencing a robust revival, with growing demand for vehicle loans signaling renewed consumer confidence. According to the State Bank of Pakistan (SBP), auto financing surged to Rs. 257.36 billion by March 2025, reflecting a significant increase from Rs. 248.82 billion in February 2025. This upward trajectory underscores the sector’s recovery and its pivotal role in driving Pakistan’s economic growth.

Auto Financing: A Year of Progress

The car loan market has shown impressive growth, with a 7.5% year-on-year (YoY) increase compared to March 2024, when financing stood at Rs. 239.47 billion. The recovery began gaining traction in August 2024, with auto financing at Rs. 227.3 billion, and has since maintained steady momentum. However, the current figures remain below the peak of Rs. 368 billion recorded in June 2022, before economic challenges and elevated interest rates slowed the market.

Metric	March 2024	March 2025	YoY Growth
Auto Financing	Rs. 239.47B	Rs. 257.36B	7.5%
Consumer Financing	Rs. 807.15B	Rs. 873.75B	8.25%
Personal Loans	Rs. 242.03B	Rs. 267.67B	10.59%
Housing Finance	Rs. 199.87B	Rs. 199.43B	-0.11% (MoM)

Why Consumers Are Turning to Auto Loans

Despite high vehicle prices and persistent inflation, bank leasing and auto loans have become go-to solutions for buyers seeking affordable car ownership. These financing options allow salaried professionals and small business owners to spread costs through manageable monthly payments. The accessibility of car financing in Pakistan has made both new and used vehicles more attainable, fueling demand in the automotive market.

Broader Consumer Financing Trends

The growth isn’t limited to auto loans. Total consumer financing in Pakistan reached Rs. 873.75 billion in March 2025, an 8.25% YoY increase. This encompasses loans for vehicles, personal expenses, and housing. Key highlights include:

Personal loans rose to Rs. 267.67 billion, up 10.59% YoY and 0.48% from February 2025.
Housing finance experienced a minor decline of 0.11% month-on-month (MoM), dropping to Rs. 199.43 billion.
Private sector credit outstanding hit Rs. 9.44 trillion, with the manufacturing sector leading at Rs. 5.41 trillion, reflecting an 11.92% YoY growth.

Other sectors also reported strong credit expansion:

Sector	Credit (March 2025)	YoY Growth
Construction	Rs. 212.76B	9.43%
Agriculture, Forestry, Fishing	Rs. 445.05B	-

A Positive Outlook for Pakistan’s Economy

The resurgence of auto and consumer financing signals a brighter economic future for Pakistan. After a period of financial caution, banks are increasingly open to lending, and consumers are regaining confidence. This trend is particularly encouraging for the automotive industry and housing sector, which could see further growth if the momentum holds. As Pakistan’s economy continues to stabilize, vehicle financing and broader consumer lending are poised to play a critical role in sustaining this recovery.

Pakistan auto financing car loans vehicle financing growth Pakistan car finance

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