Overview
Car financing in Pakistan has touched its highest point in the last 25 months, showing renewed consumer interest in auto loans. The increase reflects both economic stabilization and a growing demand for vehicles. Compared to last year, financing volumes have grown significantly, signaling a shift in the automobile and banking sectors.
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Reason
- Stable Interest Rates: The State Bank’s monetary policies have brought some relief, making loans slightly more affordable.
- Growing Demand for Cars: With economic activity improving, more families are considering buying new or used cars.
- Flexible Financing Options: Banks and leasing companies are offering easier installment plans, which attract middle-class buyers.
- Rising Mobility Needs: Urbanization and ride-hailing apps are pushing more people to own cars.
Impact
The surge in car financing is directly boosting vehicle sales. Automakers like Suzuki, Toyota, and Honda are benefiting, as financing covers a major share of their sales. Dealerships report more bookings, especially for small cars and affordable models. This also improves liquidity in the market, helping manufacturers manage supply chains better.
Consumer Perspective
Buyers see financing as a practical solution to high upfront car prices. Monthly installments make cars more accessible for salaried individuals. However, inflation still impacts affordability, and many consumers complain about high mark-up rates and processing charges. Still, financing remains the only way for many to own a car.
Final Verdict
Public opinion is mixed. Many people welcome the revival of financing options and say it is helping them fulfill their dream of car ownership. Others argue that while financing has improved, car prices are still too high, making vehicles a luxury for many. Dealers remain optimistic, expecting better sales in the coming months.
