Pakistan’s auto loans have grown steadily due to strong consumer demand.
Outstanding auto loans hit Rs328 billion in January 2026, up from Rs319 billion in December 2025. This marks the 14th straight month of increase, showing recovery in the auto sector.
Experts highlight resilient demand despite economic hurdles. Consumers rely more on bank financing for vehicles.
Surging Auto Financing Trend
Outstanding loans reached Rs328 billion in January. Growth continued for 14 months in a row. December saw slower rise due to model year changes. January picked up with new registrations.
This follows peaks like Rs368 billion in June 2022. Current levels remain below that high. Banks offer flexible terms like lower markups. Reduced down-payments help buyers.
The Rs3 million SBP cap aids small-car buyers. Middle-income groups benefit most.
Policy Push for Bigger Growth
Expert Mashood Ali Khan notes strong demand exists. Supportive policies can speed recovery. He suggests raising the financing cap to Rs6-7 million. This would open sedans and mid-range vehicles.
Lower interest rates continue to help. Easing rates boost financing activity. Imports of CKD/SKD kits jumped 137% in 7MFY26. This supports assemblers and sales.
Annual sales could exceed 200,000 units again. Broader benefits include jobs and revenues.