CARS.COM — While Volkswagen's current advertised incentives may seem modest in the wake of the automaker's diesel scandal, the discounts you could find at its dealerships could be significantly more.
It's no secret that Volkswagen cranked up the incentives on its remaining gasoline cars late last year after the automaker had to stop selling its diesel models due to emissions problems. The big questions are: How many of these deals are there, and where can you find them? To help answer the question, we contacted dealers from coast to coast and uncovered much bigger offers than we found in VW advertising.
Related: More News on the VW Diesel Crisis
Michael Horn, CEO of Volkswagen's U.S. arm, said during congressional testimony in October 2015 that VW began massive financial relief for dealers on Sept. 21, three days after the crisis broke, which included paying maximum customer satisfaction bonuses for each car sold — more than $1,500 per car, Horn said. He added that on Oct. 1, VW had wired "discretionary funds" to every U.S. dealer.
"I don't want to call out the number," Horn said, but it was a "significant amount of money in order for them to have flexibility — so, no accountability toward us, [but] flexibility to solve the most urgent customer cases, or to invest, or to put the money where they think it would be fit."
Much of that seems to have been passed on to shoppers. Autodata Corp. estimates that average incentives on VW-brand sales — such as cash rebates and financing and lease deals — were up a combined 78.4 percent in October 2015 versus October 2014, up 45.5 percent in November 2015 and up 68.6 percent in December 2015.
It's been tricky for buyers to be sure they're getting the best deal. While Autodata later estimated the average sales incentive at $4,700 per car in October, the only direct cash deal Volkswagen publically offered was a loyalty bonus for current owners. From September through December, Automotive News reports that VW's only advertised purchase incentives for all amounted to discount financing.
VW spokeswoman Jeannine Ginivan said the brand's incentives varied "month by month" in 2015. Ginivan told us VW has been "pretty open with [discussing] the discretionary funds" to dealers after the diesel crisis began, but such programs aren't normally public information.
We asked if dealers were continuing to get those funds in 2016, but VW said it would "not comment on specific details of dealer programs."
To try to clarify whether there are deals to be had, Cars.com researched VW's advertised discounts and investigated those of a selection of dealers.
The Deals You Can See
A Cars.com search of VW's published incentives across six major markets in January turned up:
- Cash rebates: No cash rebates were open to all purchasers, but a $1,000 loyalty bonus on most 2016s has been offered to current VW owners. On the Passat, the bonus is $500; it's unavailable on the CC.
- Financing: VW is offering cut-rate financing for every model except the Golf R, ranging from zero percent to 2.9 percent for shoppers with good enough credit.
- Lease deals: The monthly rates aren't eye-popping — the Tiguan's $199-a-month lease is the same as a Nissan Rogue, for example, and the Passat's $239-a-month lease is pricier than offers on a Toyota Camry or Honda Accord. VW is offering, however, hefty signing bonuses ($1,000 to $1,500) for lessees who don't currently own one of its cars.
The Deals You Can't See
The published incentives clearly don't reveal the deal you could get. We looked for the discounts that dealers really were offering. Cars.com analyzed listings for new 2016 Golf hatchbacks across the Chicago, Los Angeles and New York metro areas. Of more than 450 listings including an MSRP with the listed price, 80 percent offered no immediate discount. But the remainder had considerable price cuts — an average of $1,772 per car. Twenty-three offered prices more than $2,000 below MSRP — and that's before any negotiating took place.
We asked 10 dealers in all three markets about discounts for 2016 Golf TSI S four-door hatchbacks with MSRPs of $22,365 that they had in stock.
It didn't take long for the offers to roll in. Although one salesman said there weren't any incentives, some others offered the following:
- One salesman told us VW's $1,500 rebate for non-owners switching to VW — a deal the automaker posted on its website in December but not in January — still was in effect. A saleswoman at another dealership also mentioned the same kind of deal, though she didn't specify the amount.
- Another salesman dropped his Golf's price by $2,000.
- A third salesman slashed the price $2,891.
Those deals didn't pop up until we asked.
Going Forward
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said he expects deals on VWs to continue into 2016, but to shrink in the latter half of the year.
"As the year progresses, I would expect to see them start to roll it back, but I think the rolling back is probably going to be dependent on the reaction of consumers," he said. "I would expect to see that [rollback] probably by the second half of the year. I think most likely they're living with higher incentives at least for the first part of the year."
Even with the deals, VW sales have fallen. From September to December 2015, VW-brand sales fell 8.8 percent versus overall auto industry sales up 10 percent over the same period.
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