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Bank loans for car purchases in Pakistan jumped by more than 35% year on year in December 2025, highlighting a growing reliance on bank financing as vehicle prices and upfront costs remain high. According to the latest official data, auto financing reached Rs. 319 billion, compared to Rs. 235 billion in December 2024, reflecting strong demand for both new and used vehicles through leasing options.
Over the past year, rising car prices, limited disposable income, and easing consumer credit conditions have pushed buyers toward installment-based purchasing. While auto sales have faced pressure due to inflation, bank-backed leasing has helped sustain demand, especially among middle-income consumers.
On a month on month basis, car loans increased slightly by 0.3%, indicating stable but cautious growth. Alongside auto financing, personal loans for house building rose 10.3% YoY to Rs. 220 billion, while credit card borrowing surged 30.5% to Rs. 182 billion, signaling broader consumer credit expansion. Overall, consumer financing climbed 15% YoY, reaching Rs. 998 billion by the end of December 2025.
The rise in car loans aligns with improving market sentiment, lower interest rate expectations, and aggressive bank promotions. Analysts believe that continued stability in inflation and interest rates could further support auto financing growth in early 2026.
“The sustained rise in car financing shows consumers are adjusting to higher prices by spreading costs over longer tenures,” a banking sector analyst noted.
