Volkswagen's New 2.99% P.A. Finance. What's The Deal?

thebigsleep on 07/09/2019 - 10:35
Last edited 07/09/2019 - 10:39

Volkswagen have started offering a low comparison rate for vehicles again in time for MY19 plate clearance. I've been considering purchasing a Golf and now is starting to feel like the right time to buy. Although the website is very vague, it mentions there may be a balloon payment (Guaranteed Future Value) but doesn't tell you what that is and they offer no online calculator to help you calculate the repayments over time.

Does anyone have any experience purchasing from Volkswagen under a deal like this?
* What is the balloon payment on a Trendline 110 Golf on loan for 48 months?
* Are you still eligible for the deal if you trade in a non-Volkswagen vehicle?
* Can I put some extra money down to reduce the payments?
* What fees are typically involved?

This will be the first time I've purchased a new/demo car. I've done research of what's typically involved however I'm weary of the lack of info about this deal.

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Comments

    • thebigsleep on 07/09/2019 - 10:48

      I'd prefer not to contact them as in the past I've found that's a way for them to continuously call you back to try and secure a sale.

      I've also seen the thread on the 1.99% deal - a different deal with different rates and different repayments and no mention of a balloon payment figure. I didn't find the info I needed there.

      • spackbace on 07/09/2019 - 10:50
        +1

        I'd prefer not to contact them as in the past I've found that's a way for them to continuously call you back to try and secure a sale.

        No one will keep calling you if you simply answer and say "not interested".

        We have better things to do, but we do have a job to do which is to follow up enquiries. If you keep avoiding calls, we'll keep trying to contact you.

        • dylanando on 07/09/2019 - 11:24

          Wrong, I enquired once. they rung daily for about 2 weeks even when i said im not interested. I finally just blocked their number.

          • spackbace on 07/09/2019 - 11:28
            -2

            @dylanando: I'm wrong because you have 1 example?

            • dylanando on 07/09/2019 - 11:28

              @spackbace: opposed to your personal experience?

              • spackbace on 07/09/2019 - 11:43
                -1

                @dylanando: Yeah I'm a salesperson, I deal with more than 1 customer. My colleagues are salespeople and I know what they do.

                So yes, I have more than 1 solitary example.

            • p1 ama on 07/09/2019 - 14:22
              +7

              @spackbace: In this case, yes, because you specifically said:

              No one will keep calling you if you simply answer and say "not interested".

              He found a counterexample, which means that this statement is not true.

              Perhaps "not many" salespeople will call you back, but "none" is a strong statement and you got caught out for exaggerating.

          • xuqi on 07/09/2019 - 11:33

            @dylanando: Correct use of phone Block & Junk mail. :)

        • Skramit on 07/09/2019 - 13:55

          I once had an Audi guy call me 14 times over 3 weeks before giving up.

          • [Deactivated] on 07/09/2019 - 19:41

            @Skramit: Lol, so you didn’t think to tell him to piss off after the first couple of times? Obviously led him on.

            • Skramit on 07/09/2019 - 20:06

              @[Deactivated]: Didn’t answer any of the calls. I knew their office number no never picked up.

              • [Deactivated] on 07/09/2019 - 20:48

                @Skramit: Well seriously no wonder he kept ringing back, and now your are complaining about the calls lol.

                • Skramit on 07/09/2019 - 21:37

                  @[Deactivated]: Not complaining at all. I was more amused he tried for so long.

      • xuqi on 07/09/2019 - 10:54
        +1

        If you're contemplating making a financial decision, then you need to ensure you understand it. The best way to do so would be to engage with them.

        If they pester you then simply ask them not to do so, by letting them know you're considering options, etc. but avoiding them, and seeking info elsewhere isn't the best way to go about this.

        T&C's will differ between each offering so info someone else provides here based on past offers, may/may not be valid now.

  • fantombloo on 07/09/2019 - 10:46
    +2

    I'm weary of the lack of info about this deal.

    Don't be wary of searching "VW finance" on this site.

  • spackbace on 07/09/2019 - 10:48
    +1

    In this instance it says a balloon payment "may apply"
    https://au.volkswagen.com.au/offers-pricing/hatches-sedans/g…

    2.99% p.a. comparison rate only available to approved applicants of Volkswagen Financial Services (VFS). VFS is a trading name of Volkswagen Financial Services Australia P/L. ABN 20097071460, Australian Credit License Number 389344. Excludes other offers. Model exclusions apply. Terms, conditions, fees and charges apply . A lump sum at the end of the loan may also apply. Comparison rate based on 5 year secured consumer fixed rate consumer loan of $30,000. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

    Thought of calling a dealer and talking to the Business Manager?

  • Iamnotcheap on 07/09/2019 - 11:54

    Usually the deals don’t need a balloon- it’s a measure to keep the repayment low for the duration of the loan if you intend to trade in after the 5 years. The loan itself does attract a little more interest as result if there is a balloon.

    You can generally do better by seeking own finance and going in and asking for a better price. This deal means you pay the display price - no haggle (generally speaking). As that cushion pays for the lower interest rate.

  • Skramit on 07/09/2019 - 13:45
    +1

    If the dealership is offering you low finance, they will be over-charging you on the purchase price (relative to their best offer).

    In these situation, the dealer never loses, only you do.

    The dealer might offer 3% finance, but would have to pay the finance company (VW Finance) a lump sum on top as part of the same to make up for the lack of interest coming through. Therefore the lowest sale price on the vehicle they will negotiate with you is naturally higher than what you could negotiate if not financing the car or getting your own finance.

    Its basically just marketing spin, dont be a sucker as you lose either way - you either pay it in extra interest, or upfront on the total cost.

    EG VW GOlf is say $25,000. If you were buying with cash you might be able to negotiate say 23,000 (just for arguments sake).

    However on their "special offer!!! OMG 3% finance!!!" you wouldn't get close to 23,000, more like 24,990 :) As the dealer has to give, say $1500 of the sale price, as a lump sum to VW Finance to make up for the loss of interest. Thats how alllllll the 0% or 1% finance offers from dealerships work - theres no such thing as a good deal in these situations.

    • brad1-8tsi on 09/09/2019 - 11:00

      Not quite correct.

      A few of the Skoda guys I know on FB have just got the 1.99% deal and got a discount on the vehicle as well

      • Skramit on 09/09/2019 - 11:06

        I’m generalising obviously.

        You might still get a discount but it won’t be a big as paying cash or own finance.

        • brad1-8tsi on 09/09/2019 - 11:10

          One got $5k off. I'm not talking small amounts - just the same discount you'd get paying cash

          • Skramit on 09/09/2019 - 11:29

            @brad1-8tsi: I stand by my comments though. Generally the low interest deals work as I described.

            Your friends deals clearly fit into the exception to the rule category.

            • brad1-8tsi on 09/09/2019 - 11:31

              @Skramit: Still valid. you can't just exclude an example because it doesn't fit with your theory.

              • Skramit on 09/09/2019 - 11:51

                @brad1-8tsi: I'm not excluding. I'm just saying its an exception to the rule.

    • Jalif on 22/09/2019 - 23:53

      Generally not in this sort of case.

      Manufacturer sponsored low interest loans are a way to sell more cars, even if the brand loses a little on interest.

      Sometimes there is s clause that you cannot negotiate the purchase price, but often even this is flexible.

      Any other finance you get approval for at a car dealership is almost certainly a bad deal.

  • JIMB0 on 08/09/2019 - 07:53

    Good chance of a large payment when it suddenly goes putt putt putt outside of warranty.

  • reactor-au on 08/09/2019 - 17:41

    New golf coming next year

    • thebigsleep on 09/09/2019 - 00:47

      I'm aware of the Mk 8. but I've also heard rumours of it's $30k base price-tag too.

  • cokito on 08/09/2019 - 21:06
    +1

    Hi @lachlanedwards I can give you some numbers based on my experience dealing with VW finance 2 years ago.

    Firstly, it is not completely true that you can't haggle the price of the new vehicle as they don't know whether you are going to finance it or pay cash at that point (you never reveal the "secret" till you secure your price). I have done my research beforehand and called 5 or 6 different VW dealers and asked for the exact options I wanted in the car and based on realistic prices, I have told them what I wanted to pay for the car. 4 of them told me to go away basically as I was way under the price where they make any money.

    I ended up getting a Golf Wagon MY18 Comfortline (inc. Driver Assistance Package, tinted windows and rubber boot mat) RRP was ~$35,500 for $32,400 at 1.8% finance which I was happy with at the time.

    A breakdown of the finance is:
    I am paying $190.80 per fortnight for 4 years.
    I will have a residual amount (balloon) of $14,258 at the end of the 4 years, which at that point, I can choose to keep it or return it back to the dealer and VW Finance will cover the cost (Guarantee Future Value) of $14,258. I suspect the car will be worth ~$18,000 by then (by having a look at similar 4yo VW Golf Wagon).

    Hope that info helps you narrowing down your options.

    Cheers!

    • spackbace on 08/09/2019 - 21:28

      Except this deal doesn't necessarily require a balloon payment at the end

    • thebigsleep on 09/09/2019 - 00:47

      Thanks @cokito! Awesome advice for the haggling process too, I'll be sure to remember that.

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