Auto Financing Revs Up to Rs249B as Rates Fall

Car loans in Pakistan jumped to Rs249 billion by February’s end, up from Rs241.6 billion in January, thanks to cheaper interest rates pushing people to lease vehicles. Back in August 2024, loans were at Rs227.3 billion, still way below the Rs368 billion high from June 2022. Interest rates dropped from 22% to 12% in eight months, making bank leases a hot choice for new and used cars.

From July 2024 to February 2025, vehicle sales hit 89,770—up 50% from 59,700 the year before. Imports of car parts (CKD/SKD kits) also climbed 23.4%, reaching $575 million compared to $466 million last year. Experts say loans will keep growing with low rates, and car sales are bouncing back strong. But some buyers struggle—loans max out at Rs3 million, terms are short (five years for cars up to 1,000cc, three for smaller ones), and you need 30% upfront. Indus Motor Company’s asking the government to ditch the Rs3 million cap and tweak taxes on imported parts for a fairer market.