By on October 22, 2015

Volkswagen Chattanooga Tower

Volkswagen is offering up to double the average amount of incentives on some of its cars to help dealers during its diesel crisis, Bloomberg reported (via Automotive News).

Dealers, who received no-strings-attached cash from Volkswagen at the beginning of this month, are offering up to 11 percent off their cars’ stickers to help weather the storm of its diesel cheating scandal. The industry average is roughly 6.2 percent according to TrueCar.

Volkswagen is also offering a $2,000 “loyalty discount” and interest-free financing to Volkswagen owners who trade-in their cars (including TDIs) for newer Volkswagens. Volkswagen is also heavily discounting for sale its Passat and offering its Jetta for $139 a month for a 36,000-mile/36-month lease.

(Or, I guess you could lease an Eos for $379 a month for 3 years with $3,000 down. — Aaron)

Those incentives are designed to increase traffic to its dealerships, whose sales have slumped this year — even before the diesel crisis — and expect scandal-related fallout to continue later this year.

Even before the scandal, Volkswagen spent an estimated $4,261 per vehicle in incentives for September, according to Autodata. That figure is up 50 percent from 2014 and higher than the industry average of $2,507 according to Edmunds.com data compiled by Bloomberg Intelligence.

Volkswagen dealers across the country are scheduled to meet Thursday in Florida at the automaker’s annual dealer meetings.

Roughly one in five cars Volkswagen sold in America were diesel models, according to the automaker. Volkswagen issued a stop-sale for most of those cars in September after the Environmental Protection Agency notified the carmaker that those cars illegally polluted.

 

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50 Comments on “Volkswagen Has Brilliant Plan To Sell Cars During Crisis (Hint: It’s By Giving You Money)...”


  • avatar
    28-Cars-Later

    I want zero down leases for $2-379, VAG. Maybe after you eat some depreciation for awhile you’ll learn to create product which doesn’t lose as much.

  • avatar
    qfrog

    I’m trying to buy a ’16 Golf Wagon 1.8T this week. Excellent time to buy a VW if VW is your thing. Through the VW partnership program and a SCCA membership the pricing starts at $500 below invoice. If you own a VW you are at $2500 below invoice until Nov 2nd.

    • 0 avatar
      CJinSD

      And if someone hits your VW in a year it will be totaled and you will be $8K upside down on your loan. Buy gap insurance if you can get it.

      • 0 avatar
        qfrog

        Good point. Gap insurance is included in the policy I priced out for the VW. I’ll be moving to a different insurer for all four of my cars when I buy the VW. I’ll have gap for the VW and new vehicle replacement too so I’m not too concerned with short term resale or replacement should somebody drive into me and wreck the thing which is the most probable way it would be totaled as I doubt I’ll track it.

      • 0 avatar
        krhodes1

        If you are starting out at $2500 below invoice, you are HIGHLY unlikely to be particularly upside-down unless you are doing a 7 year loan or something. That is the equivalent of putting about ~20% down on MSRP.

        • 0 avatar
          CJinSD

          After Audi was unfairly slandered by Morley Safer, I picked up two nice five year old ones for about 20% of MSRP; one with 34K miles and an audiophile stereo. It could happen again.

          • 0 avatar
            krhodes1

            TDIs aren’t directly alleged to have killed anyone. And the car in question is not a TDI.

          • 0 avatar
            CJinSD

            Neither of my Audis had automatic transmissions, so they weren’t the mainstream media’s killer krauts either. If you’ve followed the TDI story, you should know that there are environmentalists who claim a body count for VW’s elevated levels of oxides of nitrogen, and know that there are a large percentage of VW buyers feeble minded enough to believe environmental scaremongering.

    • 0 avatar
      brettc

      I’m thinking the $2000 extra cash will probably be offered for the foreseeable future, maybe until they can sell TDIs again or perhaps even after. Would like to trade my 2012 TDI wagon and get a TSI S wagon but without heated seats being an option on the S trim, VW can suck it.

      • 0 avatar
        qfrog

        The parts catalog suggests that the S model cars have seat heaters too bu they are not enabled. That is unless you are in Canada where the cloth seats have the seat heaters enabled. Go look at VW.ca to verify. The same seats are sold in Canada and are made by Lear in Mexico. When I pick my car up I’ll set about enabling the seat heaters with a different climate control head unit and a passenger seat occupancy module which I believe supplies the power to both seat heaters.

        • 0 avatar
          brettc

          Interesting. Did you look at the catalog at the dealer? I looked at vw.ca yesterday to verify and it doesn’t say anything about the Trendline having heated seats unless I missed something. It looks like the Trendline is the same as the S trim in the U.S. so it would be nice if the seats did have the heating units. I don’t know why VW can’t make heated seats an option like they did with the A4 models. I don’t want the SE trim, no need for the extras on it. But with this information maybe it wouldn’t be as difficult as I was thinking. I guess it’s worth checking into.

  • avatar

    This is going to really hurt them in the next 3-5 years. They are going to have a hard time selling cars, and the leases are going to be murcder when VW is stuck with them at the end. VW already had horrible depreciation, now what’s it going to be like? They offer these incentives and cheap leases and they are going to be stuck with a bunch of worthless cars at the end of the lease. They are going to burn a LOT of capital staying afloat in the US, maybe the rest of the world will help carry them through this.

    • 0 avatar
      28-Cars-Later

      If it got bad enough they could withdraw from the USDM and give their dealers one of the other brands such as Skoda or SEAT to sell. Play up the Czech or Spanish connection, respectively, even though both are essentially generic VAG brands at this point. Maybe retool Chattanooga to build product for export.

    • 0 avatar
      ducatimechanic

      I hope you bought VLKAY (VW stock) when it was really low, it was quite the bargain. They might have another big drop where I can double up, but I don’t think that’s likely (one can always hope). VW will probably lag for a few years, and by then they’ll have converted over to electric cars with diesel, gasoline, propane, natural gas, and maybe hydrogen (a big IF there) only as supplemental power (auxiliary power units – APUs).

      • 0 avatar
        28-Cars-Later

        VLKAY had been falling from 50 to 35 just before the drop to 24. Needs to consolidate more before I would commit significant funds. 20DMA is 26.32, it might hang around there and then I’d wait for the golden cross with the 50.

        Why is VAG listed on the OTC instead of being an ADR on a real market?

    • 0 avatar
      matador

      This is the Mitsubishi playbook all over again. I expect a decent number of repossessions, and a huge glut of VW cars in the next few years when leases expire.

      There will be great deals at that point, but those aren’t the customers that you want. Nobody wants to cater to thrifty shoppers with no brand loyalty.

    • 0 avatar
      Richard Chen

      The dealers are the other customers that VW needs to keep around, and they haven’t been well going into this problem. If VW hemorrhages dealers, would there be anyone desperate enough to replace those franchises?

  • avatar
    eggsalad

    Still waiting for $999 down/$99 per month leases. Golf or Jetta, don’t care.

    I will never own a VW again, but if I could lease one for $3400 over 24 months, it probably ought to be okay for two years… right?

  • avatar
    Lythandra

    I went last weekend to look at GTIs and I currently drive an 03 GTI. I didn’t mention price at all and after the test drive the salesman gave me an offer at MSRP. Really? I then mentioned their online price for the car I test drove and he then quickly lowered it $2500. I had already filled out some paperwork to get a trade in value for my GTI and had to mention the $2k loyalty amount for him to take that off as well. Then they came with an offer of only $500 for my car. I laughed a bit and said no thanks. I wasn’t rude at all and asked him to up the trade amount if he wanted a sale. He played the make me wait 15 mins alone game and came back saying his manager would not offer more so I left. Now having a few days to think about it all I don’t want to give that guy a sale at all even if he contacts me again. Test drove the Focus ST and will probably pick that up later this year as it impressed me more than the GTI.

  • avatar
    bball40dtw

    This is a big problem for VW. Once these customers are gone, they’re gone. They will go to a Ford, Honda, Toyota, Hyundai or Chevy store and never come back. Now that they can’t sell their diesel smack anymore, the junkies will start to get clean. Ford, GM, Toyota, Honda, and Hyundai have some methadone for you VW junkies. They might even have a new drug for you that doesn’t have $900 maintenance at 40K miles.

  • avatar
    readallover

    VW could double or triple it and I still would not go near one again. They would need a looooooooooong warranty to get people back. Of course, that would probably bankrupt them.

  • avatar
    Fordson

    The VW haters kill me – I have a 2011 GTI Autobahn, 5-door 6MT. Now, it has only 47k miles on it and it’s never seen winter, but it’s 5-year-old car that was MSRP $30,600 new. I can get $18k for that car all day long. My VW dealer offered me $15k on it as a trade on a new GTI.

    Edmunds has had six or seven different VWs as long-term cars over the past five years, putting anywhere from 20k to 25k miles on them, and have had zero issues with any of them. So yeah, I think you’re OK having one for two years, buddy.

    And $900 40k mile service – ? I have no idea what you’re talking about and suspect you don’t either.

    The base-model Camcord echo chamber here becomes tiresome…

    • 0 avatar
      jetcal1

      Fordson,
      Congratulations, you are a statistical outlier. We don’t “hate” VW, nor do we all drive camcords. I would love to go back to a VW, I’ve owned 4 of them.

      • 0 avatar
        Fordson

        I don’t think that resale value is a statistical outlier. And try getting that money for a 2011 Civic Si. Matter of fact, try finding somebody who WANTS a 2011 Civic Si…and yes, that’s pertinent because that was the competitive product to the GTI in 2011.

    • 0 avatar
      DanHumphrey

      Let’s see… my ’07 had issues with:

      intake manifold flap motor
      ABS pump
      CD changer

      over the span of 3.5 years. All handled under warranty, to be sure, but I ran away from that thing screaming. No way I was going to own it out of warranty.

      Two can play the anecdote game.

      It did drive nice, I’ll give it that.

    • 0 avatar
      dr_outback

      A TDI with the DSG and AdBlue will run about $700-$750 for the 40k. Take off half the cost of its a manual transmission TDI.

    • 0 avatar
      bball40dtw

      Oh I know what I’m talking about when it comes to VW service. On a previous Sajeev thread about DSG transmissions, I actually called VW dealerships. The 40K mile service quote ranged anywhere from $720-$1050. That was last year, but I can imagine much has changed.

      https://www.thetruthaboutcars.com/2014/02/piston-slap-dsg-das-sticky-gearbox/

      • 0 avatar
        Fordson

        Just took a quick look at a VWVortex thread from a year ago…a guy in Queens (expensive – NYC area) said his local dealer charged $700 – $350 was for DSG.

        One other guy said he was quoted $1,100. A service advisor from Keffer VW in Huntersville, NC (pretty high-volume VW dealer), replied, saying:

        “YIIIIIKES. 40k here is around $630, out the door. That includes the DSG service which is $279.99. Oil change, cabin filter, oil change, rotation and spark plugs are also included. If you’re paying $1100, you’re being straight scammed.”

        And I get coupons for $75 off any service over $500 from my dealer constantly – just like you would for any make of car you bought.

        And for any of the VW turbo fours, spark plugs are not even replaced until 60k.

        If you don’t have a DSG, the whole thing is half that price (my dealer quoted me $260 for the 40k on my 6MT). So to just throw out there that VWs require “$900 maintenance at 40k miles”…c’mon. That’s a worst-case scenario.

        • 0 avatar
          bball40dtw

          I mean, I called a few dealerships and nobody was under $720.

          I do think the wise choice is to go with a manual transmission on any VW that offers it. I’ll even admit that a 1.8TSI Golf at a really good price is tempting for me. I liked my VWs, but they had issues that I haven’t experience after getting rid of them. My C-Max is boring me lately, but replacing it with a Golf scares me.

          • 0 avatar
            Fordson

            I think the C-Max got a bad rap…people lost sight of the fact that it got real good mpg for what it is, because it didn’t get the PROMISED mpg. And as a car; as a driver, a Prius is no comparison to it…it’s not a penalty box.

            Good to hear it’s been trouble-free…that’s what I have heard from other owners, too.

            If the $2 grand incentive is still around later next year, after the initial dealer shortage is addressed, I might get a Golf R 6MT.

          • 0 avatar
            bball40dtw

            It’s not a penalty box, but before I bought the C-Max, the two cars in the garage were a GTI and Focus ST. It’s a step down from them. I get MPGs in the 40s, so it’s fine.

            I like the current crop of AWD hot hatches/sport compacts. I’d like to drive a Golf R and Focus RS back to back. I’m guessing it’s going to be similar to Mk6/7 GTI vs Focus ST. The GTI is a Swiss Army knife and the Focus ST is a hammer.

  • avatar
    Davekaybsc

    Somebody please explain this to me. Why does a $28K Passat 1.8T Sport, with a $0 down, 36 month lease, have an estimated payment of $438/mo? On what planet is that a good deal? That’s Audi money.

  • avatar
    Joss

    That’s not true Edmunds has had issues with the GTI. I can’t remember exactly what – but I know they have because I’ve been reading their updates.

  • avatar
    VDubLoser1120

    The 40k maintenance on any VW with the DSG transmission at a dealer is going to cost you $700-900. Spark plugs, oil, tire rotation and transmission flush is what is required. If you’ve got a Mom and Pop VW shop you trust, will run you $500-700. The parts and fluid alone for the DSG flush is around $150.

    Only issues Edmunds has ever had with their Volkswagens have been tires and stereo not working issues. Which makes sense because VW stereos are shit.

  • avatar
    redwing497

    I wonder if any of these incentives would apply to a Golf R. I’d strongly consider one if so, especially with pretty attractive lease terms.

    • 0 avatar
      Lythandra

      The $2k loyalty is supposed to but who knows if the dealer will lie about it. The only R at the dealer I went to had it inside and wasn’t allowing test drives. I’m not sure how you sell a car without a test drive.

      • 0 avatar
        krhodes1

        When the car is a high performance limited edition car that you only have ONE of, I can totally see being very, very stingy with the test drives. The guy who will ultimately buy it is likely a fussy [email protected] who wants no miles on the car, and will pay at or above MSRP.

        It drives like a GTI, but faster and more balanced.

  • avatar
    Fordson

    VW is already selling a lot of Golf TSIs and GTIs…I bet they sell a ton of them with this cash. A Mk7 GTI, with the MIB II infotainment system coming in 2016 models, is a pretty nice piece.

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