Porsche UK reneging on finance deals

[EC2]

Sport_Turismo_GTS said:

86 said:

Just greedy profiteering. VW finance are a major player who will hedge their exposures well in advance. They will know every day what they have to fund. Toyota clearly value their customers Porsche it seems just want to take your trousers down. As an aside who is mad enough to fund cars at 10% !! That’s painful

You don't hedge an exposure when the customer is not guaranteed to take out the finance!

Indeed, because you are not hedging deal by deal but you do hedge a certain (high) percentage of your budgeted business to protect yourself and increase your chance of hitting unit volume forecasts. Given how financially aware most Porsche buyers are likely to be I find it strange that of all the VW FS offers Porsche seems to have some of the highest rates.

On a slightly related topic, the news that the Alpine sportscar will probably go offsale in Europe from July next year due to regulations on various safety systems does raise the question of whether the electric Macan/Cayman/Boxster might be released early with bugs galore as the existing cars will not warrant investment in new systems (hopefully someone can confirm if these cars already meet the changes?).

[Hobo]

I may have missed something in the replies to date, but the OP said he 'signed a finance deal' at time of ordering the Porsche. I find that very odd, as have never signed a finance agreement until the car is physically available for delivery. Yes, finance may have been gone through and approved, but surely the formal paperwork wasn't signed.

As such, its just life. Bank rates have changed in the period between placing the order and the car becoming available, so these increases are being passed on. I'd be annoyed also, but would have been expecting it to be honest.

[Chemical Ali]

Hobo said:

I may have missed something in the replies to date, but the OP said he 'signed a finance deal' at time of ordering the Porsche. I find that very odd, as have never signed a finance agreement until the car is physically available for delivery. Yes, finance may have been gone through and approved, but surely the formal paperwork wasn't signed.

As such, its just life. Bank rates have changed in the period between placing the order and the car becoming available, so these increases are being passed on. I'd be annoyed also, but would have been expecting it to be honest.

Im afraid I read the same.If you have signed a deal they cannot renege on it. More likely that was what they were offering at the time and the sands have shifted. Thats how it is Im afraid.

If you have signed a deal then you have grounds for action.

Would be clearer if you could be specific. Have you signed a deal?

[86]

Sport_Turismo_GTS said:

86 said:

Just greedy profiteering. VW finance are a major player who will hedge their exposures well in advance. They will know every day what they have to fund. Toyota clearly value their customers Porsche it seems just want to take your trousers down. As an aside who is mad enough to fund cars at 10% !! That’s painful

You don't hedge an exposure when the customer is not guaranteed to take out the finance!

You don’t hedge deal by deal but like all finance houses they know what percentage of deals come to fruition. People like Toyota are still honouring 4.9% and will be for rest of 23 if you ordered last year

VW Finance have been raising money at low rates. You have to be pretty desperate to pay 11% on finance for a car.

https://www.vwfs.com/en/media/press-releases/2022/...

[Square Leg]

Looking back at an email my wife had when she bought her Golf (via VWFS) - she hadn’t actually signed a finance agreement but as she was accepted for finance before the rates went up, they honoured the lower rate.

[dudleybloke]

I hope they are paying 10% interest on any returned deposits!

[Hobo]

Square Leg said:

Looking back at an email my wife had when she bought her Golf (via VWFS) - she hadn’t actually signed a finance agreement but as she was accepted for finance before the rates went up, they honoured the lower rate.

Correct. You get accepted for finance, but don't sign anything until the car turns up. This is what the OP said though, he said he signed the finance agreement, and I struggle to see that happening.

As for VWFS, that is no doubt their (or in this case the OPC's) choice. In this case, the OPC (or VWFS) decided they they were to increase the APR in line with the market increases, probably in the knowledge they had a massive waiting list for people wanting cars and could sell it on without issue.

Clearly it is going to annoy people, as will significantly increase monthly payments, but not really the fault of VWFS. The world has changed in the past 12 months and credit is no longer as cheap as it was. Go try getting a mortgage now on an offer made 12 months ago. In one way it may be good. There will no doubt be less buyers around due to the costs, so less cars, better residuals, better exclusivity, and potentially more chance of getting the cars previously out of reach.

[ClaphamGT3]

Just pay cash/finance it independently- 10.9% is ludicrous

[RacerRyan]

Anyone had any luck with more competitive PCP offers?

Majority of the big name companies I know of are all around the 10% APR mark.

[ags11]

If more normal depreciation returns, ie 10%, combined with 10% apr it’ll make these very expensive fun if financed.

[AJAYE2015]

ags11 said:

If more normal depreciation returns, ie 10%, combined with 10% apr it’ll make these very expensive fun if financed.

Dealers will have to discount haha

[993rsr]

ags11 said:

If more normal depreciation returns, ie 10%, combined with 10% apr it’ll make these very expensive fun if financed.

Indeed, change in market dynamics is coming.

[Andyoz]

AJAYE2015 said:

Dealers will have to discount haha

Hard with the inflationary pressures on their input costs.

They are a bit screwed...was bound to happen as economies are an emergent system (even though central bankers seem to think otherwise and that they can 'control' them)

[Cheib]

86 said:

Sport_Turismo_GTS said:

86 said:

Just greedy profiteering. VW finance are a major player who will hedge their exposures well in advance. They will know every day what they have to fund. Toyota clearly value their customers Porsche it seems just want to take your trousers down. As an aside who is mad enough to fund cars at 10% !! That’s painful

You don't hedge an exposure when the customer is not guaranteed to take out the finance!

You don’t hedge deal by deal but like all finance houses they know what percentage of deals come to fruition. People like Toyota are still honouring 4.9% and will be for rest of 23 if you ordered last year

VW Finance have been raising money at low rates. You have to be pretty desperate to pay 11% on finance for a car.

https://www.vwfs.com/en/media/press-releases/2022/...

Those bond deals were issued a year ago, that money will have long since been spoken for.

[Chipper]

I’ve been looking at GTS models for the past couple of months and three vehicles that I was following have all dropped 5k and are still up for sale. The entire network seems to be reducing prices so I just can’t see how dealers can carry on saying order books are still full with two year waiting lists. If the waiting lists are that strong dealers would be still fighting to get used car stock not dropping their prices.

[Hobo]

Chipper said:

I’ve been looking at GTS models for the past couple of months and three vehicles that I was following have all dropped 5k and are still up for sale. The entire network seems to be reducing prices so I just can’t see how dealers can carry on saying order books are still full with two year waiting lists. If the waiting lists are that strong dealers would be still fighting to get used car stock not dropping their prices.

But waiting lists are still strong, as I took delivery of my 992 Targa GTS back in May 2022 and placed an order at the same time for another one, and having chased it earlier this week, and still many months away from delivery.

I fully suspect my delivery to come forward as people baulk over finance rates, but how many... who knows.

I'm wanting the next one to be a Gen 2 anyway.

[Longy00000]

I think all the prestige car brands are softening at the moment. Mclaren have def, porsche have, some ferrari but not all and some of the Aston cars.

Higher interest rates can lock you into paying several hundred a month more than a year or 2 back for the same car.
This WILL curb demand and WILL lead to cancelled orders resulting in new cancelled cars being available on the forecourt which then makes the used ones on the forecourt being less attractive and so a reduced price is applied.

The time to have bought was early 2021 with hindsight. Lots of new cars still available in fields , cheap interest, dealers realising the pipeline of new cars coming through was emptying so offering higher part ex prices. Win win.
Today not quite the same.
Supply getting better from the factories
Interest rates up
Falling part ex prices
Inflation upping the cost of the new car
Lose lose now.
I wouldn't be accepting 11% interest rates in the current dynamics of the market. As disappointed as I woukd be having waited many months for the new car I think I would walk and see how it plays out in the coming year

[Joscal]

I switched my deposit/allocation from the new T to a 992.2 C2S last week and they were very keen to make an offer on my T.

I’m sure the market is changing but suppose no one truly knows how it’s going to pan out.

[Milemuncher]

Offers will just be a function of the stock they’re holding.

Very few 991 Ts in the network. Loads of 992 GTSs and Turbos.

[Guyr]

I enquired about a VW for the wife today and was offered 6.9% APR, so it's more down to how much Porsche choose to load the rate than it is the cost of funds to the VW group.