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Good car finance offers prompt growth even in poor Q2

Market insight quote Jim Reid

Poor sales results in April and May mean it’s down to June to pick up the slack in what will be a tough quarter for dealers looking to hit targets.

Big buying decisions tend to be put off when it comes to election time and the effects of the result may still be felt towards the end of this month as things settle down.

It’s always interesting in a bad month to look at who is still making gains and part of that success has to be down to offering convincing retail offers that persuade consumers to buy.

Volkswagen Group brands Škoda, Seat and Porsche have all posted impressive percentage increases where most other brands have dropped double digits.

Škoda saw growth of 9% in May, to 6,713 units and the brand has a really strong mix of offers and price points for customers to take advantage of. These include 0% deals on the entry-level Citigo, one of the most affordable cars to finance in the UK at just £135 a month after a £751.72 deposit.

The 0% deals at Škoda are spread across models, such as the Rapid, Rapid Spaceback and Yeti. Škoda’s more aspirational products, such as the Superb and Kodiaq, attract a higher APR, at 4.9% and 5.8% respectively, but these cars are desirable enough to warrant a bit of a premium. It also shows confidence in the new Kodiaq that it is not being rushed out of showrooms on a cutthroat finance offer.

Core product, such as the Octavia, is at 2.9% at an affordable £229 a month. These deals are clearly hitting their mark with buyers in what has been a slow month for the retail market.

Sister-brand Seat saw its registrations increase even further at 11% to 3,882 units. There’s only one 0% deal with the Spanish carmaker, on the Alhambra. Surprisingly, there are no other super-low-rate deals in its range, with 6.5% APR on its entry-level Mii. However, this higher rate is due to the low deposit of £146 and monthly payments at the same price. The finance house and dealer has to make a margin somewhere.

There is no vehicle in Seat’s line-up that will cost a customer more than £270 a month in the examples given, making the entire range accessible to the average buyer.

Porsche’s sizeable 24.9% increase in May registrations to 1,278 units just shows how the premium sports market is insulated from traditional market pressures. But it’s not just a silly jump, it’s actually backed up by some strong deals designed to conquest sales.

A Cayenne diesel for £265.28 a month opens up the brand to a huge market of customers and shows that while the car divides Porsche enthusiasts it still works as an entry point for the brand. There is a £15,500 deposit, but if you’re trading in a decent mileage high-spec volume car and fancy being a Porsche owner for the first time, the offer is there. The same goes for the smaller Macan at £373.46 a month. Suddenly owning a Porsche doesn’t seem that unattainable.

There are of course the 911 Carrera S and GTS Cabriolet, which get into pricier territory, but the APR on those deals is actually lower than on a Seat Ibiza in Q2.

Model Finance type Deposit Term Monthly payment Final payment APR Offer ends
Škoda
Citigo 5dr Colour Edition 1.0 MPI 60PS model, with candy white paint PCP £751.72 42 months £135 £3,473.28 0.00% 03/07/2017
Fabia Hatch Monte Carlo 1.2 TSI 90PS model, with corrida red paint PCP £854.90 42 months £195 £6,060.60 2.90% 03/07/2017
Rapid Sport 1.2 TSI 110PS model, with optional candy white paint PCP £1,330.50 42 months £219 £5,035.50 0.00% 03/07/2017
Rapid Spaceback SE Sport 1.2 TSI 110PS model, with race blue metallic paint PCP £932.90 42 months £235 £5,507.10 0.00% 03/07/2017
Octavia Hatch SE Manual 1.0 TSI 115PS PCP £2,431.08 41 months £229 £6,818.40 2.90% 03/07/2017
Superb Estate SportLine 2.0 TDI 150PS model, with moon white metallic paint PCP £3,451.92 47 months £345 £11,365.20 4.90% 03/07/2017
Yeti Outdoor SEL Drive 1.2 TSI 110PS model, with optional candy white PCP £2,115.60 41 months £229 £9,095.40 0.00% 03/07/2017
Kodiaq (5 seat) SE 2.0 TDI 4x4 model, with moon white metallic paint PCP £5,031.11 41 months £329 £12,871.80 5.80% 03/07/2017
Seat
Mii Design 3dr 1.0 12V 60PS PCP £146 48 months £146 £2,916.42 6.50% 03/07/2017
Ibiza 5DR FR Technology 1.2 TSI 90PS PCP £899 48 months £199 £4,813.34 6.50% 03/07/2017
Toledo Style 1.2 TSI 110PS with metallic paint at £540 PCP £2,199 48 months £205 £4,594.98 4.90% 03/07/2017
Leon SC FR Technology 1.4 TSI 125PS with metallic paint PCP £2,699 48 months £215 £6,956.18 4.90% 03/07/2017
Leon 5dr FR Technology 1.4 TSI 125PS with metallic paint PCP £2,699 48 months £215 £7,318.47 4.90% 03/07/2017
Leon ST SE Dynamic Technology 1.2 TSI 110PS with metallic paint PCP £2,299 48 months £209 £6,675.05 4.90% 03/07/2017
Alhambra SE Lux 2.0 TDI 150PS with metallic paint PCP £9,999 48 months £265 £11,321 0.00% 03/07/2017
Porsche
Macan S Diesel PCP £12,000 36 months £373.46 £30,091.25 6.50% 02/07/2017
Cayenne Diesel PCP £15,500 36 months £265.28 £35,750 6.30% 02/07/2017
Cayenne S PCP £14,500 36 months £639.41 £36,475.80 6.30% 02/07/2017
718 Cayman PCP £10,300 36 months £383.03 £25,159.80 6.40% 02/07/2017
911 Carrera S PCP £21,700 36 months £819.21 £48,489.90 6.10% 02/07/2017
911 Carrera GTS Cabriolet PCP £26,100 36 months £1,130 £51,965 6.10% 02/07/2017


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