Volkswagen Coronavirus Financial Relief and New Car Incentives

Jack R. Nerad | May 13, 2020

For the first two months of this year, Volkswagen was on a very nice roll. Overall its sales were up 9.4%, and its SUV sales alone were up 15%. The latter figure was particularly heartening for the brand, demonstrating quite clearly that the Volkswagen Atlas and Volkswagen Tiguan models were hitting the mark with American car buyers. Furthermore, the company was just launching the all-new 5-passenger Atlas Cross Sport to further expand its SUV footprint.

Volkswagen Coronavirus Financial Relief and New Car Incentives

Then came the coronavirus pandemic, and its effects were so profound that despite a strong January and February, Volkswagen sales for the full first quarter were down 13%. That's what a 42% decline in March sales will do. But Volkswagen is fighting back with a "Community-Driven Promise" program that provides relief through coronavirus car payment plans to current customers and offers impressive incentives for new customers to buy or lease a vehicle soon.

"We know this pandemic has caused significant stress and worry across America and is putting financial strain on millions of households," Scott Keogh, CEO of Volkswagen of America, said in a statement. "We have a commitment to help our customers, our dealers, our employees, and our communities in a time of crisis."

Volkswagen Customer Relief Programs - Find the best deals!

The COVID-19 epidemic and the massive job layoffs that followed in its wake have left many consumers wondering if they can make their looming car payments. Volkswagen and Volkswagen Credit (VCI) are offering aid to those customers with a generous list of options.

First, existing Volkswagen customers who financed or leased through VCI could be eligible for up to 90 days of payment deferrals. VCI will not charge any fees for the payment deferral itself but finance charges will still accrue on auto loan accounts. In certain circumstances, past maturity (end-of-loan) fees might be waived as well. Qualifying lease customers can obtain lease extensions of up to six months.

Volkswagen is encouraging its customers to access and manage their accounts online at vwcredit.com, which is available 24/7. Requests for payment assistance or lease extensions should be initiated through the website and are available through June 1, 2020. Volkswagen may extend the offer beyond that date.

Volkswagen customers who need financial support and didn't lease or finance their vehicle through Volkswagen Credit should contact their lender or leasing company directly. Depending upon individual circumstances, many lenders are now willing to assist with various payment options that include payment deferral.

Second, to give new customers added peace of mind during this time of difficulty, Volkswagen is offering to waive up to six months of payments if a new Volkswagen Credit customer loses a job due to economic reasons. There are specific requirements for eligibility, so be sure to read the fine print.

Third, Volkswagen is automatically extending its new and certified pre-owned (CPO) warranties that would have expired between March 1 and May 31, 2020. The extension is for three months, and owners need not take any action to benefit from the program.

 
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Volkswagen New Car Incentives - Find the best deals!

Volkswagen's Community-Driven Promise also offers some pretty robust incentives to new-car shoppers who are trying to decide if now is the time to buy a new or certified used Volkswagen. 

For those concerned about their employment in the short-term due to coronavirus-induced layoffs, Volkswagen and VCI are giving qualified new buyers the option of delaying their first payment for up to 120 days combined with 0% APR financing for up to 72 months for most new vehicles. The program is set to run through June 1. 

In addition, Volkswagen is offering 0% APR financing for up to 60 months on most certified pre-owned vehicles. This offer expires June 30.

Volkswagen Factory Closures - Find the best deals!

Manufacturing operations are suspended at Volkswagen Chattanooga, VW's lone U.S. assembly plant. Models built there include the Atlas and Atlas Cross Sport SUVs, and the Passat sedan. The production suspension, which began March 21, remains in effect and Volkswagen has not announced a re-start date. About 3,500 VW employees are affected by the production downtime.

All Volkswagen Chattanooga employees were paid in full during the initial phase of the work stoppage but, starting on April 11, VW initiated emergency furloughs with full paid healthcare benefits for production and maintenance workers. All employees have been asked to self-quarantine and maintain social distancing as directed by the CDC.

Volkswagen of America and Faurecia, one of its fabrics and materials suppliers, have entered into a collaborative effort to manufacture personal protective equipment to help fight the pandemic. With a large initial order and logistics help from VW, a Faurecia factory in Mexico has started to produce face masks and gowns to be used by medical professionals battling COVID-19.

Volkswagen Economic Outlook & Sales Forecast - Find the best deals!

Volkswagen was one of the vast majority of auto brands that experienced steep drops in sales beginning in mid-March. Self-quarantining and restrictions on personal interaction were among the most important factors in sending the seasonally adjusted annual sales rate down to a dismal 11.2 million. 

Volkswagen offered guidance on its sales outlook for the remainder of the year on April 20. In a statement, the company said, in part: “In all, we expect the volume of global demand for new vehicles in 2020 to be between 15 and 20% lower than it was the previous year. The volume of demand in the markets for passenger cars and light commercial vehicles in North America in 2020 is likely to be 25 to 30% lower than in the prior year. We anticipate a dramatic decline in the second quarter, followed by slow market recovery in the remaining quarters of 2020.”

J.D. Power's pre-virus sales forecast for 2020 U.S. sales was 16.9 million vehicles. As this is written J.D. Power's most recent 2020 outlook for total vehicle sales is 12.6 to 14.5 million units.

The information in this article is from Volkswagen and was accurate as of May 11, 2020. Plans and programs may have changed since that date. Be sure to confirm with your Volkswagen dealer that offers discussed in this article remain valid.

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