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Renault aggressive as new rates are revealed

The launch of spring marketing campaigns leading to the March plate change has brought finance promotions back with a vengeance, just as predicted.

Carmakers who had waited to see the effect of list price cuts now realise the tried and tested methods of making a car affordable to a customer are as valid as ever.

Most companies now have a three month campaign in place, though some have chosen to limit their offers to the end of January. Given the cost of bringing a programme to market, and all the associated advertising, the expectation is that many of these short term plans will be rolled over into the months ahead.

In general, rates are good but not exceptional. Ford has selected models at 9.9% over three years and with no deposit, which means customers can use the full extent of their trade-in to reduce the loan amount from the outset.

But it is the exception and many other carmakers are still looking for 11% to 12% over the conventional two- or three-year term.

As always, the most aggressive player in the market is Renault which is offering either 0% conditional sale on a 50% deposit or a competitive PCP package, with a nominal deposit and around 8.9%, across most of the models in its range.

There are several new initiatives, notably from Saab and Volvo, both of which are targeting the small business market. Customers registered for VAT will be able to run a Saab 9-3 2.0t for £299 a month or a Volvo S40 1.6 for £249 a month. There are also low rate PCP packages for non-VAT registered customers who want to take advantage of the offers.

Mitsubishi has revived the 50-50 deal, pioneered by Vauxhall a couple of years ago, and is offering it on Colt, Carisma and Space Star. The move should help dealers hold cars close to list price and protect residuals.

In all this surge of activity the notable absentee is VW Financial Services, as there are no offers on Audi, Seat, Skoda or VW itself. The group was slow to react to pricing pressures last year and, apart from Skoda, suffered as a result. It will be interesting to see how long it can hold out.

HIGH STREET LENDERS (36-MONTH LOANS)
Loan Amount Lender APR Monthly Repayment
with PPP
Monthly Repayment
Without PPP
£2,000* Abbey National 15.9% £78.27 £69.18
Barclays 17.9% £82.70 £70.98
Halifax 19.4% £84.16 £72.10
HSBC 16.9% £80.20 £70.04
NatWest 20.9% £84.09 £73.44
£5,000 Abbey National 11.9% £184.81 £164.40
Barclays 15.9% £201.07 £173.26
Halifax 15.5% £199.18 £172.18
HSBC 13.9 £192.30 £168.68
NatWest 12.9% £190.68 £166.54
£10,000 Abbey National 9.9% £358.81 £320.22
Barclays 13.9% £390.71 £337.99
Halifax 12.9% £383.56 £333.23
HSBC 10.9% £368.32 £324.52
NatWest 10.9% £371.56 £324.51
£15,000 Abbey National 9.9% £538.23 £480.34
Barclays 11.9% £568.97 £494.14
Halifax 12.9% £575.34 £499.85
HSBC 9.9% £544.70 £480.33
NatWest 9.9% £549.98 £480.34
Source: Automotive Management**

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