Pakistan’s auto financing market continued its strong recovery in June 2026, with outstanding vehicle loans rising 38% year-on-year to Rs381.69 billion, reflecting growing consumer confidence and improving demand for automobiles. The latest figures, compiled by Arif Habib Limited (AHL) using State Bank of Pakistan (SBP) data, also showed a 3.4% month-on-month increase in auto financing.

The growth comes alongside a rebound in vehicle sales. According to the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales reached 22,741 units in June, marking a 4% increase year-on-year and a 29% rise compared to the previous month. Analysts attribute the improvement to lower financing costs, easing economic conditions, and renewed consumer interest in purchasing new vehicles.

The report also highlighted positive momentum in other lending segments. Housing finance climbed 29% year-on-year to Rs267.09 billion, while personal loans increased 7.68% to Rs282.89 billion. Overall consumer financing expanded by more than 25%, reaching Rs1.15 trillion. Meanwhile, private-sector credit grew to Rs11.16 trillion, supported by increased lending to manufacturing, construction, and agriculture.

Financial experts say the continued rise in bank lending signals improving business activity and consumer sentiment. However, they caution that sustaining this momentum will depend on stable macroeconomic conditions, manageable interest rates, and consistent growth in household purchasing power.