Pakistan’s automobile market is under immense heat due to the rapid price hike of vehicles. While most companies rely on putting the burden on dollar prices, others seem to hold a smart silence on the issue. This situation is now lighting a flame on the customers’ end. Yesterday, we shared the news of the Lahore High Court taking the notice of the issue asking for answers from the federal government. While the issue yet awaits progress, the record-breaking numbers of car finance in Pakistan for the month of March 2021 are here.
Car Finance In Pakistan
As per the official numbers, car finance in Pakistan observed a record-breaking high figure of PKR 285 billion in the month of March (As compared to last year). The year-on-year increase of 30% has rung new bells in the market of automobiles.
Customers are shifting towards car financing massively owing to the never-ending debate of increasing car prices. If we roll back a few years, leasing a car was considered the last option to go for. However, today the story has totally changed. More customers are switching to finance because of low-interest rates and flexible payment plans of up to 7 years.
What Does Low-Interest Rate Mean?
With more car buyers moving to finance, we often hear the question, “What does a low-interest rate mean?”. To put it simply, a low-interest rate means lesser installment amounts for any financed vehicle. It is basically the additional cost we pay to the bank for favoring us with a flexible and long-term installment plan.
In the former practices of car finance in Pakistan, banks offered the lease at higher interest rates. This made it practically difficult for buyers to settle for a high amount added to the vehicle’s cost.
Is Car Finance The New ‘Way’?
Keeping in view the above information, it is safe to prepare yourself to focus on finance options instead of purchasing a car. If we look at the car prices scenario, the rapid and unjustified increase of car prices is leaving no way out for the customers looking to buy new cars. While this may be valid, car finance with low-interest rates of 7% as compared to the 13.5% of last year, is now becoming the new way out for car buyers in Pakistan.