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Car financing in Pakistan has been on a constant decline for 10 months in a row now according to data released by the State Bank of Pakistan (SBP).
Auto financing used to enjoy up to 60% share in the total vehicle sales which has now dwindled to just around 25%. According to analysts, one of the major reasons behind a sharp decline in car financing is the rising monthly payments due to the persistent increase in interest rates which currently stands at a whopping 22% as opposed to just 7% in March 2020.
Another reason is the stringent financing criteria. Keep in mind that the State Bank modified the prudential rules for auto financing in 2021, as per which:
Suzuki Alto 660cc is currently the most sought-after car in the market, despite dwindling sales it still is the highest-selling car in Pakistan. Now for a tenure of 5 years, which is the maximum one can avail using financing, and a 30% downpayment, the EMI for Alto AGS turns out to be a whopping 62,577 a month, not to mention Rs 841,000 payment upfront (including processing fee).
The story of other cars isn’t different either, as someone buying a Suzuki Wagon R AGS in installments will need to pay back Rs 78,865 per month for straight 5 years, while those opting for Kia Picanto AT will be returning Rs 80,180 per month. Too much for small hatchbacks, wait till you see the EMI of the Suzuki Swift which is a mind-boggling Rs 106,000+ a month.
The EMI for Honda City Aspire CVT is even higher at Rs 132,000+ per month, while that of the base Toyota Corolla Altis is Rs 156,700+. If you step up for expensive crossovers & SUVs, get ready to pay Rs 187,500+ for Kia Sportage AWD, while Changan Oshan X7 FutureSense will require you to pay Rs 200,800+ per month. Lastly, The Toyota Fortuner petrol will fetch Rs 389,600+ out of your pocket for 5 consecutive years if you decide to finance it against a 30% downpayment.
Car financing allowed many people to fulfill their dream of owning a brand-new car. Unfortunately, that route is no longer accessible. Can you afford a new car via financing today? Read the full article here:
Auto financing used to enjoy up to 60% share in the total vehicle sales which has now dwindled to just around 25%. According to analysts, one of the major reasons behind a sharp decline in car financing is the rising monthly payments due to the persistent increase in interest rates which currently stands at a whopping 22% as opposed to just 7% in March 2020.
Another reason is the stringent financing criteria. Keep in mind that the State Bank modified the prudential rules for auto financing in 2021, as per which:
- The minimum required down payment has been increased from 15% to 30%.
- The maximum tenure of auto financing has been reduced from 7 years to 5 years.
- The maximum debt-burden ratio, allowed to a borrower, has been decreased from 50 to 40%.
- Auto financing limits availed by one person from all banks in aggregate, will not exceed Rs 30 lac at any point in time.
- Financing for imported vehicles has been completely prohibited regardless of engine capacity.
Suzuki Alto 660cc is currently the most sought-after car in the market, despite dwindling sales it still is the highest-selling car in Pakistan. Now for a tenure of 5 years, which is the maximum one can avail using financing, and a 30% downpayment, the EMI for Alto AGS turns out to be a whopping 62,577 a month, not to mention Rs 841,000 payment upfront (including processing fee).
The story of other cars isn’t different either, as someone buying a Suzuki Wagon R AGS in installments will need to pay back Rs 78,865 per month for straight 5 years, while those opting for Kia Picanto AT will be returning Rs 80,180 per month. Too much for small hatchbacks, wait till you see the EMI of the Suzuki Swift which is a mind-boggling Rs 106,000+ a month.
The EMI for Honda City Aspire CVT is even higher at Rs 132,000+ per month, while that of the base Toyota Corolla Altis is Rs 156,700+. If you step up for expensive crossovers & SUVs, get ready to pay Rs 187,500+ for Kia Sportage AWD, while Changan Oshan X7 FutureSense will require you to pay Rs 200,800+ per month. Lastly, The Toyota Fortuner petrol will fetch Rs 389,600+ out of your pocket for 5 consecutive years if you decide to finance it against a 30% downpayment.
Car financing allowed many people to fulfill their dream of owning a brand-new car. Unfortunately, that route is no longer accessible. Can you afford a new car via financing today? Read the full article here:
How Viable is Car Financing Today? | CarSpiritPK
Car financing in Pakistan has been on a constant decline for 10 months in a row now according to data released by the State Bank of Pakistan (SBP). Auto financing used to enjoy up to 60%
carspiritpk.com
