Why is everyone buying cars in Pakistan?

Sit with three or four friends anywhere in Pakistan right now and wait for the conversation to turn. It always turns to cars. One of them is telling you this is the best time to upgrade. Another swears there'll never be a better moment to buy new. And it isn't just talk. Sazgar, Honda, Indus, Kia, their revenues have been climbing year after year against where they sat in 2023. The showrooms are busy, the bookings run long, and the companies are posting some of the best numbers they've ever posted.

Now hold that against what the last few years actually were for this country. We came within touching distance of default. The rupee fell hard, prices ran away from ordinary people, and plenty of families were cutting back on the basics. And yet, in those same years, more people were buying cars than before. So what changed in three or four years to walk everyone into a showroom at once?

It's worth sitting with how strange that is. When money is tight, a car is one of the first big purchases most people delay. It's almost the definition of a thing you can put off. So a broke few years should have emptied the showrooms, not filled them. The fact that the opposite happened tells you something bigger than taste is at work, something moving underneath all of us at the same time and pushing in the same direction. That something has a name, and it isn't sitting in anyone's head. It's sitting in the interest rate.

There are two separate answers to why everyone is buying, and most people only ever talk about one. The first is what's going on in our heads, the reason a car in Pakistan is never really just a car. The second is what's going on in the economy, the reason some years turn into car years and others don't. I want to spend almost all of this on the second one, because it's the half nobody explains, and it's the half that quietly hides an opportunity.

The half of the story I'm leaving for another day

The first half I've made a full case for elsewhere, so I'll keep it to a few sentences here. In this country a car is an emotional milestone, a way of telling people how well you're doing, which is why a home that once ran on a single car now keeps three or four, whether the family needs them or not. It's why the rate at which we buy cars is close to three times what it was in 2008. That pull is real, and I've pulled it apart in its own piece. This one is about the money, not the mindset.

So set the psychology aside for now, and look only at the economy. Because even if every one of us wanted a car exactly as much in 2021 as in 2025, the number of people who actually went and bought one was wildly different across those two years. Something outside our heads decides when the wanting turns into buying. And that something is a cycle almost nobody in that friend circle can name.

Why some years are car years and some aren't

Start with one plain fact about this industry: it moves in cycles. When the economy climbs, car sales climb with it. When the economy sinks, car sales sink too. So to understand why everyone is buying now, you have to understand what moves that cycle, and it comes down to two things you've heard a hundred times without anyone connecting them to your car. Inflation, and interest rates.

When prices start rising fast, the State Bank steps in to cool them, because it has a target for how high inflation is allowed to run in a year. The tool it reaches for is the interest rate, and it pushes that rate up. The interest rate is really just the price of borrowing money. Every time you take money from a bank, you hand it back with that rate stacked on top. Push the rate high enough and borrowing turns painful, so people and companies borrow less, spend less, produce less. Demand across the whole economy softens, and once demand softens, prices stop running and inflation starts to cool.

Then the cycle turns the other way. Once inflation is back under control, once the Bank can see that prices aren't climbing the way they were, it starts cutting the rate back down. Eighteen percent, then sixteen, then fourteen, quarter after quarter, each cut weighed against wherever inflation has landed that period.

And this is where it finally reaches your car. When you finance a car, the bank hands it to you at whatever the going rate is that month. At a rate of 20 percent, the monthly installment is brutal, and honestly you shouldn't take the car at all.

Drop that same rate to 14, then 13, then 12, and something quietly important happens. The car itself hasn't changed by a single rupee. The sticker price is identical. But because the rate sitting on top of it has fallen, the installment you pay every month falls with it, and a car that was out of reach last year is suddenly, on paper, within reach this year.

That is exactly where we are as I write this. Inflation has come down to somewhere around 3 or 4 percent. The interest rate, which not long ago was sitting up at 22 or 23, has been cut all the way down to about 11. Same cars, far cheaper to borrow against. So people who sat out for years are walking into banks, taking the loan, and driving the car home, and the rising sales you're seeing are mostly running on that one lever. This is what a peak year actually is. Not a country that suddenly fell in love with cars, but money that suddenly got cheap to borrow.

You can feel this in a single person across two years. In 2022, with the rate up near 22 percent, that person did the math on financing a car and walked away, because the installment was frightening. In 2025, without his taste or his salary needing to have changed at all, the rate is near 11, the installment on the very same car is a gentler number, and now he signs. Multiply that one person by a whole country and you get the boom. The wanting was always there. The cheap borrowing is what turned it into buying.

The mistake I made because I couldn't read the cycle

I learned what that lever does the hard way, from the wrong side of it. In 2021 I financed a car when rates were sitting near the bottom, around 8 percent, and I made a mistake I didn't even know was a mistake at the time. I took a plan whose rate wasn't fixed. It moved with the market, resetting every few months. From the bottom, that rate had only one direction left to travel, and it travelled it. My installment climbed, and climbed, and by the time it was done the rate behind it had reached 22 percent.

I was stuck. The comfortable payment I'd started with had turned into something much heavier, and in the end I gathered up whatever money I had and cleared the whole car off just to stop the bleed.

I've written separately about how to actually structure one of these deals, the plan, the rate, the paperwork, so I won't repeat any of that here. The only piece that matters for this article is the lesson sitting underneath it. The cycle is the thing to watch, it cuts both ways, and not reading it costs you real money. Had I understood in 2021 that a rate already at the bottom has nowhere left to go but up, I'd have made a completely different call.

Nobody in that circle ever asks the real question

Now the part almost nobody gets to, and the reason I wanted the cycle clear in your head first. Go back to that circle of friends arguing about cars. They'll debate every possible angle. Which one has the better engine, whose torque is higher, whose horsepower wins, whose price is fairer. Every last detail of the car itself.

But say one sentence to them, why don't we buy the shares of these companies instead of the cars, and watch the conversation go quiet. Most people can't even hold the thought for a second. The idea that you could own a piece of the company, instead of buying and slowly wearing out its product, simply doesn't land.

And it's worth asking why it doesn't land, because the reason is the whole trap. We're trained to see the car as the reward at the end of the earning, a solid thing you can sit inside and point to. Owning a slice of a company gives you nothing you can park in the driveway. It's quiet, it's invisible, and it feels abstract next to a real car. So the mind reaches for the thing it can touch, and walks straight past the thing that actually builds the wealth.

That's the whole reframe, and it's the difference between a consumer and an owner. When you buy the car, you own a thing that loses value the moment you drive it out. When you buy into the company, you own a slice of every car everyone else is out there buying. And here is the part that ties back to everything we just covered. The same cheap-borrowing wave that empties the showroom, the rate cut we walked through, is the wave lifting that company's revenue. The crowd walking in to buy is, from the other seat, your tailwind. It's one event, read from opposite sides of the same counter.

If you've never bought a share, here's all it really means in plain terms. A company like Sazgar is split into a large number of small pieces, and anyone can buy some of those pieces through a brokerage account, roughly the way you'd open a bank account. Own a piece, and when the company does well and grows more valuable, your piece grows more valuable with it. You didn't build the cars and you didn't run the factory. You simply owned a slice of the thing the whole country was busy buying.

Let me make it concrete, and let me be careful with it, because this is not me telling you to go and buy anything. Think back to 2023. If you'd bought a Haval that year, it would have cost you somewhere around 93 to 95 lakh.

If instead you'd put that same money into Sazgar, the company that assembles Haval here, that 93 or 95 lakh could have grown into something like 6 crore. People love to say the car itself was the investment, that a car worth 18 or 19 lakh back in 2018 sells for around 40 today. But the thing that truly appreciated was never the car sitting in the driveway. It was the company behind it, the one collecting money from every buyer who walked in.

And there's an honest catch here, the one that keeps this from being a get-rich story. An opportunity only ever looks like an opportunity once the moment has already passed. It's easy to sit here now and say I should have bought Sazgar in 2023. In 2023, standing in the actual moment with the actual decision in front of me, it didn't look obvious at all. It looked risky, because it was. Every single time you're the one who has to decide, in the present, with the outcome still unknown, that is a risk. Hindsight is the only place investing is ever easy.

What I actually did, and what it cost me to wait

I'll tell you exactly what I did, because the honest version is more useful than the clean one. I knew about Sazgar back in 2023. I thought the company was good. I still didn't invest, it was too risky for me at that point, and I'd rather admit that than pretend I called it perfectly.

I didn't invest in 2024 either. I finally put money in during 2025, and not at some clever low, I bought near a high, after the price had already run a long way up. What I did have by then was a read on the company, that a new car of theirs was coming, that there was room for it to climb further. That position is up 48 percent on what I put in.

And notice what that read actually was. It was the same cycle we started with, looked at from the owner's chair. Rates were coming down, borrowing was getting cheap, which meant more people were about to walk into showrooms and buy, which meant the company's revenue was about to swell. The exact signal that tells a buyer this is a good year to finance a car is the signal that tells an owner this is a good year to hold the company's shares. One event, two chairs. Most people only ever sit in one of them.

Whatever profit came, it came because I was sitting in a seat most people never think to take. Not the driver's seat of the car, but a seat in the company's revenue. As more people bought the car, the company's value rose, and because I owned a piece of it, some of that rise came to me. That's the thing I keep circling back to. Real financial freedom will never arrive from being a consumer. It arrives from being an owner. You cannot keep buying things that lose value and expect them to carry you toward being free.

I want to hold two things together here without smoothing them into one tidy lesson. Owning the company worked for me, and it may well be the smarter seat. And stepping into it in the live moment is genuinely risky, and there is no formula that makes that risk go away. Both of those stay true at once, and I'm not going to flatten them to make the article feel neater than the thing actually is.

The most you can do is understand how the auto sector moves, where Pakistan's economy is standing, and where you've placed yourself against both. Read the cycle the same way we did earlier: where are rates, near the bottom or the top, and is the company bringing something new to the market. That doesn't delete the risk. It just means you take it with your eyes open instead of shut.

And none of this means don't buy a car. For plenty of people a car is a plain necessity, the only real way to get to work and back. The point was never to shame the car. It's to make sure you've at least seen the other seat before you settle into one.

Buying the car, if you're going to

If you are going to buy, there are a few rules I'd hold you to, most of them learned by breaking them myself. The first is to know the true cost.

The common version is a 20 percent rule: your monthly installment shouldn't run past 20 percent of your income, and if it does, the car is simply too expensive for you right now. The stricter version is the one I use on myself, and I offer it only as mine, not as a law for anyone. I don't let myself buy a car until I could buy it three times over in cash. If the car is 60 lakh, I want to see 1 crore 80 lakh sitting in the account before I go anywhere near it.

The second rule is to buy for utility, not for status, and since I've already pointed you to the piece where I take that whole game apart, I'll leave it as a single line here. Let the car earn its place by what it does for you, not by what it says about you to a room.

The third rule is the one this entire article has been building toward. Invest first. Before you sign for the car, if you can honestly get by a while longer without it, put your money into the very companies everyone around you is busy buying cars from. Give it some time, and it isn't impossible that those returns quietly grow your income to the point where the car becomes easy to afford anyway, bought out of profit rather than out of a loan that grinds on you for years.

The seat you actually want

So the next time the talk turns to cars, and it will, do one small thing differently inside your own head. Don't picture yourself behind the wheel. Picture yourself in the room where that carmaker's shareholders are sitting, in the board meeting, and make the decision from that chair, the one the owner makes for his company. That single switch, from the driver's seat to the owner's seat, is where the real journey toward being free with money begins.

The driver's seat feels like arrival, because you can sit in it today. The owner's seat feels like almost nothing at first, because it's just a number on a screen. But one of them wears out in your driveway, and the other one, if you choose it early enough, quietly buys you all the cars you'll ever actually need. The car will still be waiting for you on the day you can buy it three times over.