Porsche Finance profiteering
Discussion
I have heard alot of chatter lately about the UK market stalling somewhat, some OPC's offering discounts on GT's etc. But in general alot of people postponing their new cars due to the outrageous interest rates being charged by Porsche Finance, close to 11% at the moment is in no way correllating with base interest rates. I am not sure but it seems this is affecting nearly new cars also, im seeing a considerable stock building of specific 992's and prices in some cases 40k or more off list price just over a year old.
Considering they are part of the VW group and look at the finance rates charged there are way lower, let alone BMW Mercedes etc, it seems its just about 'you can afford a Porsche' let alone mug enough to pay for such ridiculous extras such as Power steering plus (which makes the power steering less heavy at low speeds which i find incredible theyre profiteering on an oversight on how the default power steering should be setup!).
Welcome your thoughts and or how many people have postponed their new car because of this p1ss take?
Considering they are part of the VW group and look at the finance rates charged there are way lower, let alone BMW Mercedes etc, it seems its just about 'you can afford a Porsche' let alone mug enough to pay for such ridiculous extras such as Power steering plus (which makes the power steering less heavy at low speeds which i find incredible theyre profiteering on an oversight on how the default power steering should be setup!).
Welcome your thoughts and or how many people have postponed their new car because of this p1ss take?
This has been mentioned in other threads, but spot on and worth discussion on its own.
VW finance is a bank itself. It is an owned subsidiary of VW group. The average lending rate in Germany is 6.04%, ie if you are looking for a loan from a german bank, such as VW bank, that is the type of rate to expect. Current finance from VW is around 11.9%. So double the average.
Why? Because they can. BMW for example offer 10% off M products and 4.9% finance and 2.5k dealer contribution atm as a comparison.
https://www.autotrader.co.uk/car-details/202307159...
Some other brands are pricey on finance, some are not. But simple answer, they are price gouging on a cornered market. They hold the top position in the affordable prestige sports car market and have had many years of dominance. Now they are raking it in.
VW have essentially created an oligopoly which they control, including the finance.
But most of us know this. Question is what do you do about it?
VW finance is a bank itself. It is an owned subsidiary of VW group. The average lending rate in Germany is 6.04%, ie if you are looking for a loan from a german bank, such as VW bank, that is the type of rate to expect. Current finance from VW is around 11.9%. So double the average.
Why? Because they can. BMW for example offer 10% off M products and 4.9% finance and 2.5k dealer contribution atm as a comparison.
https://www.autotrader.co.uk/car-details/202307159...
Some other brands are pricey on finance, some are not. But simple answer, they are price gouging on a cornered market. They hold the top position in the affordable prestige sports car market and have had many years of dominance. Now they are raking it in.
VW have essentially created an oligopoly which they control, including the finance.
But most of us know this. Question is what do you do about it?
guyvert1 said:
Was is it these days with these clickbait posts?
PH needs a new sub forum for all this useless drivel..
Obviously entitled to your own opinion, but im intrigued as to why you call these facts drivel or click bait? Both i am not a fan of at all believe me. Your turn on the microphone lets hear you, why do you say this?PH needs a new sub forum for all this useless drivel..
kenofkens said:
.....mug enough to pay for such ridiculous extras such as Power steering plus (which makes the power steering less heavy at low speeds which i find incredible theyre profiteering on an oversight on how the default power steering should be setup!).
Welcome your thoughts and or how many people have postponed their new car because of this p1ss take?
Thoughts? Welcome your thoughts and or how many people have postponed their new car because of this p1ss take?
You're on a wind up.
Single worst option to find on a used 911 when searching!
At least you can code it out.
Chemical Ali said:
Its always ironic when people comment on a thread that the thread shouldn't be there.
And to answer the clickbait accusation - so what do you have to say? Just pay up like the sheep you obviously are?
Stop calling people sheep, it makes you sound like a thick conspiracy loon. And to answer the clickbait accusation - so what do you have to say? Just pay up like the sheep you obviously are?
WRT the question… finance is product like any other, either buy it, or don’t. If you have cheaper alternative funding, then use it.
When base rates were close to zero VW finance rates were I am guessing somewhere in the 5 to 7% range ? Base rate is now 5.25% and VW finance are now charging 11% very little has changed in terms of the margin they charge over UK base rates. Comparisons with BMW aren't really relevant because VW finance for Porsche have never operated on a model like BMW do for their cars.
Cheib said:
When base rates were close to zero VW finance rates were I am guessing somewhere in the 5 to 7% range ? Base rate is now 5.25% and VW finance are now charging 11% very little has changed in terms of the margin they charge over UK base rates. Comparisons with BMW aren't really relevant because VW finance for Porsche have never operated on a model like BMW do for their cars.
Just my opinion but i don’t believe that to be entirely true. Since becoming a listed company, their model has come a lot closer to the BMW model of being more of a volume producer than a bespoke individual prestige car maker. Admittedly not all there range has gone this way the GT products to an extent are still limited numbers but even they have increased in production number significantly..
WRT the finance, just go else where. When buying cars in the past, I have taken dealer finance if it gets me a discount on the price, but I have always then taken out a cheaper loan elsewhere to pay off the higher dealer finance. Simple. Go elsewhere.
Cheib said:
When base rates were close to zero VW finance rates were I am guessing somewhere in the 5 to 7% range ? Base rate is now 5.25% and VW finance are now charging 11% very little has changed in terms of the margin they charge over UK base rates. Comparisons with BMW aren't really relevant because VW finance for Porsche have never operated on a model like BMW do for their cars.
That’s what I was thinking too Isn’t the finance rate academic because of manufacturer and dealer contributions? You could have a 1000% finance rate, but if the contributions lowered your costs to 5p, you are quids in.
They also seem to lower the interest rates when they have stock to shift.
Anyway, the cheap lease thread currently has an example of an Audi Etron PCP (I know that isn’t a lease per se) but an inflated GFV and £2.5k deposit contribution are lowering the monthly payments ALOT. £500 down and £250 a month for a used 2yr old example with 15k miles. 11.9% APR.
Someone, somewhere has decided what they need out of that car and have juggled the numbers to suit. Could equally have a lower APR, lower GFV to still come out with the same £500 down and £250 a month payments etc.
They also seem to lower the interest rates when they have stock to shift.
Anyway, the cheap lease thread currently has an example of an Audi Etron PCP (I know that isn’t a lease per se) but an inflated GFV and £2.5k deposit contribution are lowering the monthly payments ALOT. £500 down and £250 a month for a used 2yr old example with 15k miles. 11.9% APR.
Someone, somewhere has decided what they need out of that car and have juggled the numbers to suit. Could equally have a lower APR, lower GFV to still come out with the same £500 down and £250 a month payments etc.
Edited by wyson on Tuesday 21st November 20:27
MB140 said:
Cheib said:
When base rates were close to zero VW finance rates were I am guessing somewhere in the 5 to 7% range ? Base rate is now 5.25% and VW finance are now charging 11% very little has changed in terms of the margin they charge over UK base rates. Comparisons with BMW aren't really relevant because VW finance for Porsche have never operated on a model like BMW do for their cars.
Just my opinion but i don’t believe that to be entirely true. Since becoming a listed company, their model has come a lot closer to the BMW model of being more of a volume producer than a bespoke individual prestige car maker. Admittedly not all there range has gone this way the GT products to an extent are still limited numbers but even they have increased in production number significantly..
WRT the finance, just go else where. When buying cars in the past, I have taken dealer finance if it gets me a discount on the price, but I have always then taken out a cheaper loan elsewhere to pay off the higher dealer finance. Simple. Go elsewhere.
Will be interesting to see how things develop next year or so.
Prestonese said:
I don't think the rates are that egregious. The basic funding cost to finance a loan for VW / Porsche is currently around 6-7%. Factor in overheads, marketing and staffing costs, commissions and credit risk, there's actually not much margin left.
You mean after the fat commissions and car allocation linked to finance (that you can cancel if you wish, sir).Weren't Oracle offering nearer 8% ?? Can costs possibly be an almost 50% uplift on the cost of the finance itself ??
Prestonese said:
I don't think the rates are that egregious. The basic funding cost to finance a loan for VW / Porsche is currently around 6-7%. Factor in overheads, marketing and staffing costs, commissions and credit risk, there's actually not much margin left.
VW Bank. 2022 - 1506 employees. Profits Gross 752,000,000 euros.Im not stating this is good, bad or indifferent. Just context.
Chemical Ali said:
Prestonese said:
I don't think the rates are that egregious. The basic funding cost to finance a loan for VW / Porsche is currently around 6-7%. Factor in overheads, marketing and staffing costs, commissions and credit risk, there's actually not much margin left.
VW Bank. 2022 - 1506 employees. Profits Gross 752,000,000 euros.Im not stating this is good, bad or indifferent. Just context.
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