Data from the State Bank of Pakistan (SBP) shows that the amount of outstanding vehicle loans fell dramatically from Rs368 billion in June 2022 to Rs140 billion.
The central bank announced a first reduction of 150 basis points, from 22 percent to 20.5 percent, on June 10 after maintaining its policy rate at an unprecedented high for nearly four years. A second reduction to 19.5 percent was announced on July 29.
Private banks have enticed potential customers with lower interest rates and cheaper insurance. Buyers are nonetheless gravely concerned about the high cost of locally built cars because many of them are unable to pay the hefty monthly loan payments.
