Auto financing in Pakistan climbed to its highest level in June 2026, reflecting improving consumer confidence and easier borrowing conditions.

According to Arif Habib Limited, outstanding auto loans reached Rs382 billion at the end of June, marking a 38 percent increase from Rs277 billion a year earlier. On a monthly basis, financing grew 3.4 percent from Rs369 billion in May.

The latest figures indicate a strong recovery from 2024, when outstanding auto financing had fallen to nearly Rs225 billion after high interest rates and tighter monetary policy sharply reduced demand for vehicle loans.

Private sector credit also expanded during the month. Total lending to the private sector rose to Rs11.16 trillion in June, up 15.4 percent year-on-year and 4.4 percent from the previous month.

Business financing increased to Rs9.60 trillion, posting 14 percent annual and 4.7 percent monthly growth. Consumer financing climbed 25.4 percent to Rs1.15 trillion, driven by gains across all major categories. Personal loans rose to Rs283 billion (7.7 percent), housing finance reached Rs267 billion (29 percent), while credit card outstanding increased to Rs205 billion, up 29.1 percent from a year earlier.

The rise in auto financing coincides with a sharp rebound in Pakistan’s automobile industry. Official data shows car and jeep production surged more than 60 percent during the first 11 months of FY2025-26, supported by stronger demand, improved financing availability, and better vehicle supply.