- Auto financing in the country has also witnessed an all time high with a monthly increase of Rs 12 billion during the month of March 2021.
- This increase in car financing can be attributed to a decrease in interest rates to 7 percent in March 2021 as compared to 13.5 in the same month last year.
The automobile sector in Pakistan is flourishing even during the COVID-19 pandemic as more and more people are buying and leasing cars. As a result, auto financing in the country has also witnessed an all time high with a monthly increase of Rs 12 billion during the month of March 2021.
Auto financing reached a record high of Rs 285 billion during March 2021, indicating a 30 percent year on year growth and 4.5 percent month on month increase, according to data released by the State Bank of Pakistan.
According to Pakwheels.com, this increase in car financing can be attributed to a decrease in interest rates. Currently, the interest rate has fallen to 7 percent as compared to 13.5 percent in March last year. A lower interest rate translates into smaller installment payments, which encourages consumers to buy more cars this year.
It is also important to note that car sales in the country have continued to rise even during the COVID-19 pandemic, which has impacted the lives and livelihoods of many in Pakistan. Reports by the Pakistan Automotive Manufacturers Association (PAMA) also show that more than 20,000 cars were sold in March 2021.
Moreover, these trends in Pakistan's automobile market also indicate that a lot of people are financing these car sales through bank loans rather than hard cash.