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Bank Financing For Cars Declines 21 Months in a Row

Car financing continued to fall 21 months in a row in the calendar year 2024, down 24.4 percent YoY to Rs. 239 billion by the end of March from Rs. 317 billion in the same period last year, according to the State Bank of Pakistan (SBP).

The auto sector has been in turmoil for the entirety of the financial year 2023-24, with automobile sales falling to 69,078 units in the first 9 months of FY24 from 110,898 units in 9MFY23.

As reported earlier, car sales were stunted in the auto market over the last 9 months due to extortionate lending rates, as well as the central bank’s limits on auto financing.

Also, cost of cars remained a significant barrier to increasing sales. While some assemblers gave discounts on registration and other charges, these efforts failed to attract many buyers.

Meanwhile, consumer financing for house building was stable at Rs. 206 billion by end-March 2024.

Personal loans on credit cards decreased by 3.6 percent YoY to Rs. 242 billion by end-March.

Overall credit issued to end-users (consumer financing) fell to Rs. 807 billion in March 2024, an 8.2 percent YoY decrease.

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