{"id":799,"date":"2024-07-25T08:25:55","date_gmt":"2024-07-25T08:25:55","guid":{"rendered":"https:\/\/pkfin.kotenterprises.dev\/?p=799"},"modified":"2025-01-07T17:21:50","modified_gmt":"2025-01-07T17:21:50","slug":"auto-financing-declines-further-amid-high-vehicle-prices-and-interest-rates","status":"publish","type":"post","link":"https:\/\/pkfin.kotenterprises.dev\/?p=799","title":{"rendered":"Auto Financing declines further amid High Vehicle Prices and Interest Rates"},"content":{"rendered":"\r\n

Islamabad, July 25, 2024<\/em> \u2013 The auto financing sector in Pakistan has experienced a notable decline for the second consecutive year, with total outstanding loans decreasing to Rs230.5 billion in June 2024, down from Rs233 billion in May. This continued downward trend reflects a significant contraction from the June 2022 figure of Rs368 billion, amounting to a total reduction of Rs138 billion over the past two years, as reported by the State Bank of Pakistan (SBP)<\/a>.<\/p>\r\n\r\n\r\n\r\n

Despite the SBP\u2019s recent decision to reduce the interest rate from 22% to 20.5% on June 10, the high costs associated with new, locally assembled vehicles have continued to deter potential buyers. This economic strain has led many consumers to opt for leasing older and more affordable locally assembled vehicles through private banks, which offer more manageable financial terms.<\/p>\r\n\r\n\r\n\r\n

Several factors have contributed to the persistent reluctance among consumers to engage in new auto financing. High monthly loan installments and continued high interest rates remain significant barriers. Additionally, the steep prices of vehicles, exacerbated by economic conditions and market dynamics, have further discouraged new purchases.<\/p>\r\n\r\n\r\n\r\n

In a bid to manage demand and address the current account deficit, the SBP has imposed financing restrictions, adding another layer of complexity to the auto financing market. Moreover, changes in the withholding tax (WHT) structure\u2014from a fixed amount to a percentage basis for smaller vehicle segments\u2014have unintentionally increased the tax burden on consumers, further complicating the financial landscape.<\/p>\r\n\r\n\r\n\r\n

The situation has been compounded by a surge in the importation of used cars during the fiscal year 2024, which has adversely impacted local vehicle production. This influx of imported vehicles has created a challenging environment for the auto financing market in Pakistan, as it struggles to adapt to shifting consumer preferences and economic constraints.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

Islamabad, July 25, 2024 – The auto financing sector in Pakistan has experienced a notable decline for the second consecutive year, with total outstanding loans decreasing to Rs230.5 billion in June 2024, down from Rs233 billion in May. This continued downward trend reflects a significant contraction from the June 2022 figure of Rs368 billion, amounting […]<\/p>\n","protected":false},"author":1,"featured_media":800,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[8],"tags":[521,402,59],"class_list":["post","format-standard"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t