Automobile financing in Pakistan has reached a new record high, reflecting strong consumer demand for vehicles despite rising interest rates. According to the latest data from the State Bank of Pakistan (SBP), car loans have surged for the 18th consecutive month, reaching an all-time high of Rs. 369.12 billion. This increase comes even after the policy rate was raised to 11.5 percent in April, showing that borrowing activity in the auto sector remains resilient.
The financing figure has climbed from Rs. 359.5 billion recorded at the end of April and has now surpassed the previous peak of Rs. 368 billion seen in June 2022. Financial experts believe this consistent growth indicates that consumers are still actively participating in auto financing schemes, despite the higher cost of borrowing. Banks and automobile companies have also played a key role by offering attractive installment plans and flexible financing options, helping maintain strong demand.
A major factor driving this trend is the growing interest in new vehicle models, particularly hybrid and electric cars. As fuel prices for petrol and diesel remain high, many buyers are shifting toward more fuel-efficient alternatives, making financed vehicle purchases more appealing. This shift in consumer preference has supported both financing volumes and overall vehicle sales across the country.
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In terms of sales performance, the auto sector recorded 17,660 units sold in May, marking a 19 percent increase compared to the same month last year. However, sales were down by 20 percent compared to April, showing some short-term fluctuations. Despite this, the broader trend remains positive, with total sales during the first 11 months of the fiscal year reaching 183,704 units, a strong 45 percent increase year-on-year.
Industry reports also highlight a significant rise in vehicle imports, as assemblers increased shipments of semi-knocked down (SKD) and completely knocked down (CKD) kits. Imports nearly doubled to $1.877 billion during July–May FY26, compared to $949 million in the same period last year.
Overall, the continued rise in auto financing and vehicle sales signals renewed confidence in Pakistan’s automobile market, driven by evolving consumer needs and improving industry dynamics.
