The impact on vehicle finance in October looks minimal, notwithstanding extremely high inflation and stricter auto lending limitations. However, the drop is gradual since there is a substantial disparity between vehicle finance in June 2022 and December 2022.
According to the most recent statistics, vehicle finance totaled Rs. 345 billion in October 2022, declining by merely 1.4% month over month and 0.1% year over year.
In its research, Arif Habib Limited (AHL) said that auto finance has fallen to its lowest point since January 2022. The decrease is not as severe as first thought, though, and if the economy stabilizes, there’s a good possibility it will reverse course and increase.
The State Bank’s restrictions, on the other hand, are perceived by consumers as making it hard to obtain a fair financing offer. A client said the following:
“If you buy an average car that costs Rs. 3.8 million, and pay Rs. 1.5 million upfront, then monthly installment is Rs. 98,000, which is huge. Because if one waits and accumulate the same amount for 2 years then there is no need for financing. The last year is just to pay markup. So why even bother with financing?”
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