Porsche Finance profiteering - Page 2 - Porsche General - PistonHeads UK

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?

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?

Was is it these days with these clickbait posts? PH needs a new sub forum for all this useless drivel..

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?

Private company with profit motive seeks to make profit. Alternative finance and alternative purchase options are available.

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?

An OPC can't make you take VW finance at 11+%. Just go elsewhere if you want finance

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? 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. 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.

Surely it's only profiteering if the buyer has no choice but to take what Porsche is offering? You may have no choice but to buy the Porsche you want from Porsche but finance can be obtained anywhere, subject to the lenders acceptance criteria.

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.

I did the ‘look elsewhere’ due diligence during a recent purchase. Couple of the 3rd party lenders were heavily promoting they were cheaper than VW Finance. They weren’t.

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

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.

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. Fair comment in that with Taycan they’re definitely marketing deposit contributions and obviously some massive discounts around on Taycan’s and 911 Turbo S currently. 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. On a loan book of Eur 45 billion

Cheib said: 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. On a loan book of Eur 45 billion VWFS operating profit was 5.6bn on 44bn revenue for 2022.

Wills2 said: Cheib said: 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. On a loan book of Eur 45 billion VWFS operating profit was 5.6bn on 44bn revenue for 2022. On 1506 employees. Thats nearly 4 million euros profit per employee. If only my company ran like that.

Chemical Ali said: Wills2 said: Cheib said: 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. On a loan book of Eur 45 billion VWFS operating profit was 5.6bn on 44bn revenue for 2022. On 1506 employees. Thats nearly 4 million euros profit per employee. If only my company ran like that. They employ around 15,000 people, VW bank is part of the wider VWFS group, it's those numbers I quoted.

Number (as of December 31) 2022 2021 Employees 1,506 1,906 From their website. Does sound too low, but thats whats on it. https://www.vwfs.com/en/investor-relations/volkswa...

VWFS rates are generally linked to the particular model of car. The rates offered on for example, Audis, all differ depending on the model and I suspect it’s all considered very carefully in order to provide the required extra incentive to help shift them. Porsche range will receive finance rate reductions once it’s clear they are needed to move stock. The alternative is to provide deposit contributions to offset the interest which believe they are now doing on Taycan.

Chemical Ali said: Number (as of December 31) 2022 2021 Employees 1,506 1,906 From their website. Does sound too low, but thats whats on it. https://www.vwfs.com/en/investor-relations/volkswa... Just so we're clear I'm not disputing that, I was clarifying that the 5.6bn in operating profit that I posted was VWFS not just VW bank's, hence the 15k employee number.

I recently went to my local Porsche dealer to talk about replacing my current car. There were two shocking outcomes.. First, they told me not to consider finance as it was too expensive. Their business had gone majority finance to no finance. The second, the sales guy told me to keep my current car and not trade it in. The service desk agreed and told me if I did trade it in one of them would be buying it. Result, I still have the same car.

Wills2 said: Chemical Ali said: Number (as of December 31) 2022 2021 Employees 1,506 1,906 From their website. Does sound too low, but thats whats on it. https://www.vwfs.com/en/investor-relations/volkswa... Just so we're clear I'm not disputing that, I was clarifying that the 5.6bn in operating profit that I posted was VWFS not just VW bank's, hence the 15k employee number. Didnt mean to sound like I was arguing. The VW family is rather large so it is a bit confusing as to which figures go where. What is clear is it makes money. And why not? As people said before, we dont have to use VW finance.

I find "profiteering" a very odd description, Porsche aren't doing anything illegal or wrong just maximising profit. Porsche as a listed company, their ultimate goal should be to maximise shareholder returns, I would be more worried if they weren't. If Porsche find these rates aren't working (in terms of sales) then they can adjust the rates offered, the market will ultimately decide. Maybe you'd be happier if, like nearly every other aspect of life in the UK, the UK Gov intervened? Possibly a Help to Buy Scheme for Porsche? BTW, you can get finance from other sources, e.g. FD have loans at 6.4 - 7.9 %.

Chemical Ali said: Didnt mean to sound like I was arguing. The VW family is rather large so it is a bit confusing as to which figures go where. What is clear is it makes money. And why not? As people said before, we dont have to use VW finance. No you didn't, I just didn't want to mislead you, yes they have a Russian doll approach, VWFS has the bank, leasing and various companies inside it, so my numbers were the rolled up amounts and you'd quoted the banks numbers.

For once a genuinely good thread, well done that guy and keep up the great posts

If you go in a shop and the product is too expensive you can walk...... Taking out finance is no different.

h0b0 said: I recently went to my local Porsche dealer to talk about replacing my current car. There were two shocking outcomes.. First, they told me not to consider finance as it was too expensive. Their business had gone majority finance to no finance. The second, the sales guy told me to keep my current car and not trade it in. The service desk agreed and told me if I did trade it in one of them would be buying it. Result, I still have the same car. And do you want to still have the same car ?? I guess the service people think that it is a very nice car ... but ultimately isn't it for the dealer to propose their options and for you to make the decision ? Since this is a finance topic, is an OPC allowed to mention alternative finance options ??? Edited by ChrisW. on Wednesday 22 November 18:03

ChrisW. said: h0b0 said: I recently went to my local Porsche dealer to talk about replacing my current car. There were two shocking outcomes.. First, they told me not to consider finance as it was too expensive. Their business had gone majority finance to no finance. The second, the sales guy told me to keep my current car and not trade it in. The service desk agreed and told me if I did trade it in one of them would be buying it. Result, I still have the same car. And do you want to still have the same car ?? I guess the service people think that it is a very nice car ... but ultimately isn't it for the dealer to propose their options and for you to make the decision ? Since this is a finance topic, is an OPC allowed to mention alternative finance options ??? For transparency, this is in the US and I have been with the dealer for years. The same sales guy told me he would not sell me a Hybrid Cayenne in 2016 because he felt it was the wrong choice. In the end he helped me buy my current car through a private sale. I have a 2013 Cayenne GTS in great condition and relatively low miles. The sales guy told me to hold on to it for now. This is at a major dealer and not a small back street place. For the finance, I told him I had a number in mind for cash and if we went over I would finance. At that time VWFS rate was about 12%. The guy said he would not run the numbers because it would offend me. He did say I could try 3rd party but he thought my cash reserves would get me into a second hand car early next year. All these factors came together and that is why they said to not buy...yet.

Then that is unquestionably good service

ChrisW. 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. 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 ?? I don't know the Oracle business well but I'd be surprised that they can churn much of a profit at those rates as they are not likely to be funding their loans cheaper than VW and their commissions are even higher (some of these independent firms pay up to 10% upfront). It may well be they have deep pockets and can ride out the thin margins currently but that presumes the market will come back quickly......

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. Gross profits though? Lots of fixed costs to include on top of everything else (i.e. regulatory capital, dieselgate fines).

Cheib said: 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. On a loan book of Eur 45 billion Exactly! That equates to interest income of about 1.8%. NatWest who everyone thinks is a poor performer generates about 3.0% NIM.

Prestonese said: ChrisW. 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. 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 ?? I don't know the Oracle business well but I'd be surprised that they can churn much of a profit at those rates as they are not likely to be funding their loans cheaper than VW and their commissions are even higher (some of these independent firms pay up to 10% upfront). It may well be they have deep pockets and can ride out the thin margins currently but that presumes the market will come back quickly...... You are correct ... the best I could find at the moment was 10% ish so some manufacturers are obviously supporting finance quite aggressively.