Pakistan's auto financing reaches Rs249 billion in February

Auto financing in Pakistan reached Rs249 billion by the end of February, up from Rs241.6 billion in January. This increase comes as falling interest rates continue to boost consumer demand for vehicle leases. The rise in auto financing began last August, when it was at Rs227.3 billion. However, it is still below the peak of Rs368 billion recorded in June 2022. Interest rates have dropped from 22% to 12% over the last eight months, making bank leases more appealing for new and used vehicle buyers. Car sales have also seen significant growth. In the first eight months of the fiscal year 2025, sales reached 89,770 units, a 50% increase compared to 59,700 units during the same period last year. This trend is mirrored by a 23.4% jump in imports of semi and completely knocked-down (CKD/SKD) kits, rising to $575 million. Analysts expect auto financing to continue increasing as interest rates remain low and auto sales rebound. However, some challenges persist for buyers. There is a Rs3 million loan cap, limited loan terms, and a 30% down payment requirement for financing options. Indus Motor Company has asked the government to remove the Rs3 million loan cap. They also want changes to taxes and duties on imported and CKD units to promote fair competition within the market.