Considering buying a new or used Volkswagen using car finance? Volkswagen finance options include secured car loans, unsecured personal loans, dealer finance, novated leases and chattel mortgages.
Compare all your Volkswagen finance options here.
Different Volkswagen finance options
There are six main Volkswagen financing options to choose from. These include:
- Secured car loan. If you want a loan with a super competitive rate, you can use your Volkswagen as collateral against a secured car loan. Rates for these loans generally range between 4.91% and 10.88% p.a. If you're buying a new Volkswagen (or one under 10 years old), you should be able to use it as security. However, you can't use the loan funds for anything other than the car purchase.
- Unsecured personal loan. You could also use an unsecured personal loan to purchase a Volkswagen. This is an option to consider if the vehicle isn't eligible to be used as security (i.e. it's too old or is a classic car) or you want to use some of the loan for another purpose, like paying for insurance or even to consolidate debt. Rates are higher for these car loans, usually between 5.49% and 25.99% p.a. Depending on the lender and your credit history, you can typically borrow from $2,000 up to $75,000. That would secure you the keys to many new or used Volkswagen models.
- Dealership finance. Volkswagen Financial Services Australia offers several finance options, ranging from promotional offers on specific cars, to business/commercial and fleet finance, as well as personal finance. The in-house finance department can arrange personal loans and salary packaging for novated leases.
- Novated lease. If you want to get a Volkswagen through your job, you might consider a novated lease. This is a three-way agreement between your employer, a finance company and yourself. The advantage of this purchase option is the monthly car repayments are taken from your pre-tax income. After consulting a tax professional, you may find this saves you money overall.
- Chattel mortgage. A chattel mortgage is like a secured car loan for a business. If you're going to use your Volkswagen for at least 50% business use, a chattel mortgage is another finance option. Under this arrangement, a lender pays for the vehicle, you own it, but the lender has a registered interest in the Volkswagen. If you use cash basis accounting, you can claim back GST on the purchase price too. This arrangement is an option if you're purchasing a Volkswagen for your business.
- Commercial hire purchase. A commercial hire purchase is really just a lease agreement. A financier buys the Volkswagen you want, then rents it back to you. You'll never own the VW, but you do get to use it. As the name implies, this is for business users only. It's only at the end of the contract when you choose to settle the residual value that you'll take ownership of the vehicle.
How much will a Volkswagen cost to run?
Running costs vary from model to model. The small hatch Volkswagen Polo (from $20,490) is the most fuel-efficient Volkswagen (as of March 2021, according to the Green Vehicle Guide) and should be the cheapest to run (according to the RACV). The Green Vehicle Guide estimates that the VW Polo 70 TSI Trendline manual model would use $1,026 worth of fuel to cover 14,000km annually. That's based on the assumption that two-thirds of the driving is in urban areas. The RACV running cost study indicates it would cost around $212.06 monthly to pay for rego, insurance, membership, servicing and tyres. Add on the above fuel costs ($85.50 monthly) and a VW Polo owner would pay approximately $297.56 ($3,570.72 annually) each month.
Meanwhile, a commercial model like the VW Amarok TDi420 Core is obviously going to cost more, thanks to its powerful turbo diesel engine, heavier duty construction and carrying capacity. For this model, the driveaway price is $50,289. The Green Vehicle Guide estimates this Volkswagen ute would use $1,516 of diesel per year to cover 14,000km, 66% of that on urban roads. Rego, insurance, membership, servicing and tyres for the Amarok totals $301.77 a month, according to the RACV. Fuel adds $126.33, bringing the monthly total to $428.10 and annual running costs of $5,137.24.
Be aware, these figures are only estimates and actual real-world costs will differ depending on how far you drive and other variables. They do not include loan repayments. You can use our car loan repayment calculator to help you work out the amount you'll need to pay out per month for a new or used Volkswagen.
How to evaluate your Volkswagen finance options
These are some of the main factors you should pay attention to when evaluating different Volkswagen finance options:
- The interest rate. Remember to compare interest rates. To get an idea of the true cost of the loan, look at the comparison rate. This includes the interest rate and fees. The lower the interest rate, the less the finance will cost.
- Fees. Check whether your finance option is subject to an upfront application fee or monthly service charge. Fees add to the cost of your loan, especially if you're taking one out over a longer period. Do your research and know what you'll pay before signing any contracts.
- Is there repayment flexibility? Lenders allow you to tailor your repayments to your cash flow, whether this is monthly, fortnightly or weekly. If you're able to make additional repayments, check if you can also redraw these should you need to.
- Loan term. Taking out a Volkswagen loan over a longer period will reduce the amount you pay, but you'll spend longer paying interest – meaning the car loan costs you more. Shorter loans are more expensive (because the loan is divided over fewer months) but can save you hundreds of dollars. You want to strike a balance between affordability and cost, so the loan term is really important.
- Balloon payments. This is an amount that is deducted from your principal (the amount you borrow), usually $5,000 or more. You are required to pay the balloon (also called the residual) at the end of your loan term. While this lowers your monthly repayments, it is a large chunk of cash to have to find at the end of your loan term. Definitely consider this when deciding if a Volkswagen loan with a balloon payment is right for you.
Compare Volkswagen car loans
Volkswagen is now the second largest car manufacturer in the world, behind Toyota. Volkswagen's colossal Wolfsburg plant is the largest car manufacturing facility worldwide.
Volkswagen arose in pre-WWII Germany, fulfilling a niche in the German car market. At the time, few could afford a car, with perhaps only 1 in 50 families owning an automobile. Volkswagen literally translates to "people's car".
The first car it produced became the iconic Beetle. The design is originally credited to Béla Barényi, a Hungarian engineer. Ferdinand Porsche later took over. The Beetle was tested in a wind tunnel normally used for aircraft development.
Since then, the company has grown and produced some of the most well-known car models ever built. They include the revolutionary Golf hatchback, the popular VW Combi van, the Passat and the plucky VW Polo hatch.
A ute came along in 2010, badged as the Amarok. The Amarok joined other commercial vehicles from the brand, such as the VW Transporter and Crafter vans.
Volkswagen bought a large portion of fellow compatriot Audi in 1964, increasing its stake to the point where it effectively owns the luxury carmaker outright. VW continued a similar strategy, buying German sportscar manufacture Porsche in 2009. Other VW Group-owned marques include Bentley, Bugatti, Ducati, Lamborghini, Seat and Skoda, as well as truck makers Scania and MAN.
Volkswagen uses its manufacturing might to create modular platforms that are shared across multiple vehicle lines and brands.
Soon, the company is launching its first battery electric vehicles, with the ID.3 and ID.4 the first expected to launch.
Volkswagen Financial Services says it's been operating for 60 years. In addition to providing finance options for Volkswagens in Australia, it also covers Audi, Bentley, Ducati, Jaguar, Lamborghini, Land Rover and Skoda.
Volkswagen Australia range
In Australia, Volkswagen markets 12 models, in several variations and body styles. They are:
|VW Australia models|
|Volkswagen Golf – A hatchback that defined the segment; from $33,000 driveaway (new model coming soon).|
|Volkswagen GTI – VW describes this as the first hot hatch; a new model based on the Mk8 Golf is due in Australia in the first half of this year.|
|Volkswagen Golf R – A higher performance version of the Golf GTI. This model is due in 2022.|
|Volkswagen Golf Wagon – A longer Golf with a much larger boot, this model is getting updated to the Mk8 Golf platform in July 2021.|
|Volkswagen Golf Alltrack – A cross country version of the Golf wagon, with lifted suspension, AWD and protective exterior trim pieces to make this Golf ready for rough gravel roads.|
|Volkswagen Tiguan – A small SUV with a manufacturer's recommended retail price from $39,690.|
|Volkswagen Tiguan Allspace – A 7-seater version of the Tiguan, with a driveaway price from $42,990.|
|Volkswagen Amarok – VW's highly praised ute, with a 2.0-litre diesel or a 3.0-litre V6 diesel engine option. Driveaway prices start from $50,289, moving to $79,026 for the V6 Aventura 580. A new, performance-focused model is coming April 2021.|
|Volkswagen Polo – A smaller hatch than the Golf, which is the cheapest VW model in Australia, as well as the most fuel-efficient. Starts from $20,490 driveaway.|
|Volkswagen Polo GTI – A more powerful, hot hatch version of the Polo. Driveaway from $35,990.|
|Volkswagen Passat – Volkswagen's mid-size sedan. Like the Golf, the Passat is available as a sedan (coming soon), wagon (coming soon) or Alltrack ($52,082 driveaway) version.|
|Volkswagen T-Cross – Based on the Polo platform, the compact T-Cross is Volkswagen's smallest SUV. Driveway from $29,990.|
|Volkswagen T-Roc – Volkswagen's crossover SUV is based on the same platform as the Skoda Karoq. The T-Roc starts from $38,438 driveaway with an 8-speed auto as standard.|
|Volkswagen Touareg – The largest VW SUV on sale in Australia, is actually a mid-size SUV. It takes its name from a nomadic group of people who live in the Sahara Desert. It shares the same platform as the Bentley Bentayga, the Audi Q7 and Q8, the Lamborghini Urus and the Porsche Cayenne. Driveaway prices start from $89,775.|
|Volkswagen California, Multivan and Caravelle – The California is a factory-built camper, based on the Transporter van. Driveway prices start from $99,632. The Multivan is also based on the Transporter, but is built as a people carrier. Prices start from $64,990. The Caravelle is a longer wheelbase version, with nine seats, making it a minibus. The Caravelle starts from $64,157.|
|Volkswagen Caddy – The Caddy van is a small van (available in multiple wheelbases) that's ideally suited to use in the city. It shares the MQB Evo platform of the Mk8 Golf. There's a people mover version on offer too, with rear windows and seating for 6. According to the Volkswagen Australia website, a new Caddy model is coming in the second half of 2021.|
|Volkswagen Transporter – Available as a mid-size panel or crewvan, the VW Transporter starts from $50,307 driveaway. Volkswagen also sells a cab chassis model for those who want to fit a tray on the rear.|
|Volkswagen Crafter – The large Crafter van is available as a medium wheelbase, standard roof, a long wheelbase, high roof or the X-long wheelbase, which is a huge van with 18.4 cubic metres of load volume. Prices start from $52,490.|
Have more questions about Volkswagen finance options?
Should I get a new or used Volkswagen?
A new Volkswagen is guaranteed to come with no faults (thanks to a factory warranty), you will have access to dealership finance and secured car finance, plus other extras. As a bonus, you get the latest car tech. However, new cars lose their value quickly (depreciation) and they will be more expensive than a used vehicle. If you buy a used vehicle you may get a better model for your budget simply because it's used, and the value of the car won't depreciate as quickly. However, you're opening yourself up to possible faults with the vehicle and, depending on the car's age, you may not be able to get a secured car loan.
What happens if I default on a secured car loan?
Your lender has the right to sell your vehicle if you are unable to pay your secured car loan.
Will I own the Volkswagen if I use a loan?
You will own the vehicle from the outset if you take out a secured car loan, unsecured personal loan, chattel mortgage (the vehicle will just have a mortgage over it) or dealership finance. You will not own the vehicle if you opt for a novated lease.
Not completely sure if you want a Volkswagen? Read our car reviews and use our Finder Score to help you make a decision.
If you're struggling with financial hardship as a result of the COVID-19 pandemic, read our Coronavirus: What to do if you can't afford your car repayments guide.
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