Auto Financing Jumps 36% in November 2025

Auto financing in Pakistan continued its upward trend in November 2025, rising to Rs. 318 billion, up from Rs. 235 billion in the same month last year, according to data compiled by Arif Habib Limited, citing the State Bank of Pakistan. This represents a strong year-on-year increase of 35.5 percent. On a month-on-month basis, auto financing also edged up by 0.8 percent compared to October, showing steady growth in consumer demand. The November figure marks one of the highest levels of auto financing in recent months and reflects a sustained recovery in car loans following a prolonged slowdown during the high-interest-rate period. Industry analyst attributes the continued growth largely to a more favourable interest rate environment. The central bank’s sharp reduction in the policy rate from its peak levels has lowered borrowing costs, encouraging consumers to return to auto financing. Rising demand for small and fuel-efficient vehicles has also supported the trend. Industry observers note strong interest in entry-level cars such as the Suzuki Alto 660cc, along with imported used vehicles, which remain popular due to limited local options in certain segments. Attractive financing offers by banks, including relatively lower markup rates and flexible repayment plans, have further boosted loan uptake during the month. Despite the growth, auto financing remains below its historic peak of around Rs. 368 billion recorded in June 2023. Market participants say lending is still constrained by regulatory limits, including the Rs. 3 million cap on auto loans, higher down payment requirements, and shorter loan tenures. Looking ahead, analysts expect auto financing to remain on a positive path if interest rates continue to ease and consumer demand for affordable vehicles stays strong.