You should think about auto financing if you’re thinking about buying a car in Pakistan. A car purchase is a significant financial commitment, so you want to make sure you’re getting the best value for your money. To discover a package that works for you, it is crucial to compare your alternatives for auto finance at this point.
Since being a car owner in Pakistan is more about utility than luxury, numerous banks provide loans for both new and old vehicles. It’s crucial to know how much you can afford to spend before making the final choice though, as this is a significant commitment that will take place over a number of years—up to 7 at most.
In this article, we’ll explore the auto-financing situation in Pakistan and banks who offer this service.
Key Considerations Before Choosing Auto Financing
- The Rate of Interest
Over the course of the loan, the loan amount that deviates from the car’s value is increased by the interest rate. For the term of the loan, the rate may be fixed or variable, depending on the state of the market and subject to change.
- Cost of Insurance and Takaful
Depending on the type and model of the car, every bank will require insurance coverage for each vehicle you finance. The annual cost of this coverage can vary from 3% to 5%.
- Finance Amount
This is the total amount the bank will provide you based on the kind of car you want to buy—new, old, domestic, or foreign.
- Duration of the Loan
This is the duration of the loan that you have in place; it is also known as the tenure. In Pakistan, the longest period of time you can borrow money is often seven years.
- Initial Settlement
Car owners occasionally find themselves in a situation where they are able to pay off their auto loan early. It is important to remember, nevertheless, that banks frequently impose a fee for early loan settlements.
- Flexible Payments
Car owners may occasionally wish to make balloon payments in order to shorten the length of time they are repaying the loan. By doing this, you may also be able to lower your monthly payment.
Leading Banks Offering Auto Financing
JS CarAamad Auto Financing
If you’re in the market for a new car, a slightly used one, or even an imported vehicle, JS Bank provides one of the best auto financing in Pakistan at affordable rates. The simple payment options enable you to own the car of your dreams. Customers who are JS Elite members can apply for a bank auto loan on an installment basis.
Features:
- Processing Fee & Charges – As per Bank’s updated SOC
- Debt Burden is capped at 40%
- Financing Amount – Up to PKR 3.0 Million (Above 1000cc)
- Financing Tenure: Up to 5 years (Below 1000cc)
- Down Payment: Minimum 30% of cost of the vehicle
- Markup Floating: 1 YK + spread
HBL Car Loan
HBL provides flexible and hassle-free financing up to 70% of the desired car’s value, allowing you to acquire the vehicle of your dreams. This provides you the flexibility to select any locally assembled vehicle at a predetermined markup to meet your specific needs.
Features:
- Financing limit between PKR 200,000 to PKR 3,000,000.
- Repay within a 5 year time period
- Choose any type of locally manufactured vehicle, new or used.
- Receive financing up to 70% of the value of preferred car
- Secured insurance at all times for peace of mind (with tracker facility)
- Multiple Partial payment facility as per your convenience
- Network of over 150 eligible dealers means you have lots of brands and cars to choose from
- HBL has over 1600 branches, you can apply for CarLoan as per your convenience by visiting your nearest branch or through other alternate channels
- 24/7 support available through HBL Phone Banking
- Dedicated after sales service.
MCB Car Loan
MCB Bank offers MCB car financing solutions through its MCB Car4U product. This simple financing solution from MCB has been created to offer you the chance to own your own car. It is a product that is suitable for both salaried professionals and self-employed individuals, providing a one-stop solution for all. There is also a special product available for agriculturists and landlords.
Features:
- Finance up to PKR 3 Million for New & Used Cars
- Finance Tenure from 1 to 5 years
- Option to purchase New, Used and Local Cars
- Finance up to 70% of vehicle value*
- Competitive Insurance Rates Option to Finance a Second Car
- Options to Prepay loan either partially to reduce monthly installment or in-full to Pay-off loan facility
- Loan Replacement: Customers can easily Upgrade their existing Cars loan with a New loan with the pre-payment penalty waived
Conclusion: Empowering Your Car Purchase Decision
While many banks will do all they can to win you as a customer, it is always worth comparing the different financing options that are available to you. Thus, you should do your research before committing to an auto-financing deal. However, all of them have their benefits, choose what suits your needs best.
