There’s positive momentum in Pakistan’s auto industry as car financing continues to climb. According to the State Bank of Pakistan (SBP), auto financing rose to Rs. 271.24 billion in May 2025, marking a 3.01% increase compared to April’s Rs. 263.31 billion. On a yearly basis, the numbers are even more promising — a 16.51% jump from Rs. 232.79 billion in May 2024.
What’s Driving Car Financing?
A few factors may be fueling this renewed interest in car financing. First, interest rates have slightly stabilized, making loan repayments somewhat more manageable. Secondly, car availability is improving, both in terms of locally assembled vehicles and imports, as supply chains recover from global disruptions. Lastly, banks and leasing companies are now offering more flexible and competitive financing plans, especially for new car buyers.
While auto financing has shown strong growth, other segments of consumer financing tell a mixed story. Loans for house building stood at Rs. 201.83 billion by the end of May. This is a 1.69% drop year-on-year, though it saw a minor increase of 0.41% from April’s Rs. 201 billion. On the other hand, personal loans rose to Rs. 268.4 billion, showing a 12.98% increase YoY and a marginal 0.04% MoM rise.
Overall, consumer financing across all categories — including cars, houses, and personal needs — hit Rs. 911.44 billion in May, reflecting a 13.77% increase compared to the same period last year. This also marks a 2.2% rise over April, indicating a consistent uptick in credit usage.
Private Sector Credit & Related Trends
Looking at broader credit activity, total outstanding credit to the private sector reached Rs. 9.47 trillion in May, up 12.64% YoY. However, there was a slight decline of 0.18% compared to April, which may reflect seasonal or industry-specific shifts.
Within this:
- The manufacturing sector received Rs. 5.3 trillion in loans, up 10.58% YoY but down 1.33% MoM.
- Construction sector borrowing reached Rs. 218.94 billion, marking a healthy 11.76% YoY growth and a 1.24% MoM increase.
- Agriculture, forestry, and fishing sectors also saw strong growth, with credit rising to Rs. 464.73 billion — a 20.67% increase from last year and 0.78% up from the previous month.
These figures suggest that while some sectors are slowing down slightly on a monthly basis, overall lending activity remains strong, especially in areas like agriculture and construction.
What This Means for Car Buyers
For anyone thinking about financing a car, the current environment presents a good opportunity. With more financing options available, somewhat stable interest rates, and banks willing to lend, car ownership has become more achievable for many Pakistanis. However, it’s worth noting that rising demand may also mean longer delivery times for popular models — so early planning is a smart move.
In conclusion, the upward trend in auto financing is a welcome sign for both the industry and consumers. It shows that people are regaining financial confidence and are once again willing to invest in long-term assets like vehicles. Whether you’re eyeing a hatchback for city drives or an SUV for the family, it’s a good time to explore your options.
Stay tuned to PakWheels Blog for the latest updates on auto financing, bank offers, and car buying tips that help you make the smartest move on your next ride.
