Auto financing in Pakistan rose sharply to Rs. 382 billion in June 2026, marking an increase of 38% compared with Rs. 277 billion recorded in the same month last year, according to data shared by Arif Habib Limited.
On a monthly basis, outstanding auto loans increased by 3.4%, up from Rs. 369 billion in May 2026.
Auto Loans Continue Upward Trend
The latest increase extends the recovery in vehicle financing, which has been gradually strengthening after remaining under pressure amid high interest rates, rising vehicle prices, and weak consumer purchasing power.
The data show that auto financing has consistently risen from the lower levels seen in 2023 and 2024. Outstanding loans have now reached their highest level shown in the reported period.
Pakistan’s policy rate stood at 11.5% in June 2026, substantially below the peak levels seen in previous years, although borrowing costs remain high for many buyers.
Lower Rates Improve Financing Demand
The rise in auto loans suggests that more buyers are returning to bank financing as monthly installments become relatively manageable compared with the previous high-rate environment.
Banks and automakers have also increasingly introduced fixed-rate financing plans, reduced markups and shorter-tenure installment offers to attract customers unable or unwilling to pay the full vehicle price upfront.
However, the Rs. 382 billion figure represents the total outstanding value of auto loans, not the amount of new financing issued in June alone.
Consumer Financing Reaches Rs. 1.145 Trillion
According to the same data, total consumer financing reached Rs. 1.145 trillion in June, rising by 25.4% year-on-year and 3.9% month-on-month.
Auto loans remained the largest category within consumer financing, ahead of personal loans, home-building finance, and credit card borrowing.
The continued rise in vehicle financing indicates improving demand in Pakistan’s car market, though affordability, insurance costs, fuel prices and high monthly installments remain major considerations for buyers.
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