Auto financing in Pakistan climbed to a record Rs 386.29 billion in July 2026, extending a strong recovery in consumer borrowing as vehicle demand and bank lending continued to rise.
Latest State Bank of Pakistan data showed auto financing increased 1.2% from Rs 381.69 billion in June, which had itself marked a record high. On a year-on-year basis, automobile financing rose nearly 40% from Rs 276.61 billion in July 2025.
The increase comes as Pakistan’s auto market shows signs of stronger demand following a period of weak sales, high borrowing costs and economic pressure.
Auto financing reaches new peak
The Rs 386.29 billion figure marks the highest outstanding level of automobile financing recorded in Pakistan.
Financing has risen steadily as borrowing conditions improve from the tighter monetary environment seen in previous years. However, financing costs remain relatively high, with the State Bank keeping its policy rate at 11.5% in July.
The recovery has coincided with stronger vehicle sales.
Pakistan’s car sales reached 17,216 units in July 2026, representing a 141% increase compared with the same month last year. Industry analysts linked the increase partly to easier leasing conditions and lower borrowing costs compared with previous years.
Passenger car sales had already risen 39% during fiscal year 2025-26 to 155,631 units, according to industry data.
Housing and consumer borrowing also rise
Auto loans were not the only area showing higher household borrowing.
Financing for house building reached about Rs 285.95 billion at the end of July. That represented an increase of 38.12% from a year earlier and a 7.06% rise from Rs 267.09 billion in June.
Personal financing also grew. Outstanding loans for personal use reached Rs 298.19 billion, rising 13.51% year-on-year and 5.41% from the previous month.
Read More: Tesla Hits 10 Million EVs as Global Auto Race Intensifies
Overall consumer financing climbed to around Rs 1.19 trillion, up 30.46% compared with July last year. It also increased 4.05% on a monthly basis.
Separate figures cited in industry reports showed credit-card financing reaching around Rs 212 billion, up roughly 30.5% from Rs 163 billion a year earlier.
Private sector credit reaches Rs 10.9 trillion
Outstanding credit to Pakistan’s private sector also expanded during July.
SBP data showed private-sector loans reached approximately Rs 10.9 trillion, representing a 12.68% year-on-year increase. However, lending fell 2.32% compared with Rs 11.16 trillion in June.
Loans to the manufacturing sector stood at Rs 5.79 trillion, up 8.14% from a year earlier. Agriculture, forestry and fishing credit jumped 37.73% to Rs 681.44 billion.
Read More: Local Auto Parts Production Gets Major Boost in Pakistan
The latest numbers suggest borrowing demand remains strong across several parts of the economy, despite interest rates remaining in double digits.
For the auto industry, record financing alongside sharply higher vehicle sales points to a significant recovery in consumer demand after several difficult years for Pakistan’s car market.
