Auto loans rise for seventh month on low interest rates

Low interest rates continued to attract buyers towards auto financing, with outstanding car loans rising to Rs276.6bn by the end of June — up from Rs271.2bn in May — marking the seventh consecutive month of growth, according to data released by the State Bank of Pakistan (SBP). Despite the recent upward trend, the current volume remains well below the peak of Rs368bn recorded in June 2022. The decline in interest rates — slashed to 11pc from 22pc since June 2024 — has played a critical role in reviving consumer demand for auto loans. However, the recent increase in car prices, following the imposition of the NEV adoption levy from July 1, may dampen financing activity in the future. Market analysts held differing views on the impact of higher vehicle prices. Samiullah Tariq, Head of Research and Development at Pak-Kuwait Investment Company, stated that July may experience slower activity due to pre-buying in June.