Bank loans for vehicle purchases in Pakistan rose sharply in December 2025, climbing more than 35% from the same month a year earlier as more people turned to financing to buy cars.
The latest data shows outstanding auto financing reached Rs319 billion by the end of December 2025. This marks a 35.5% increase from Rs235 billion recorded in December 2024, according to figures from the State Bank of Pakistan (SBP).
The growth points to stronger demand for both new and used vehicles. High vehicle prices have pushed buyers toward bank loans rather than paying full amounts upfront. Lower interest rates in recent months have also helped make borrowing more affordable, supporting this trend after a tough period for the sector.
From one month to the next, auto loans edged up by 0.3%, showing steady but measured progress.
Other areas of consumer borrowing also picked up. Personal loans for housing grew 10.3% year-on-year to Rs220 billion. Credit card outstanding amounts increased 30.5% to Rs182 billion.
Overall, total consumer financing stood at Rs998 billion by December end, up 15% from the previous year. This reflects broader willingness among households to borrow for various needs.
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The rise in auto financing comes after several months of recovery in the sector. Interest rate cuts by the SBP, including a recent reduction to 10.5%, have eased borrowing costs and encouraged more activity in car purchases.
