Volkswagen Coronavirus Financial Relief and New Car Incentives

Jack R. Nerad | April 3, 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.

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 ready to fight back with a just-announced "Community-Driven Promise" that provides financial assistance 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 coronavirus car payment plans 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.

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.

 
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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 180 days combined with zero-percent (APR) financing for up to 72 months for most new vehicles. The program is set to run through April 30, 2020.

In addition, Volkswagen is offering zero-percent (APR) financing for up to 60 months on most certified pre-owned vehicles. This offer expires June 30, 2020.

Volkswagen Factory Closures - Find the best deals!

Manufacturing operations are suspended at Volkswagen Chattanooga, VW's lone U.S. assembly plant. The production suspension, which began March 21, is planned to stay in effect until 10 p.m. on Sunday, April 12. (Easter Sunday) About 3,500 VW employees are affected by the production downtime.

All Volkswagen Chattanooga employees will be paid in full during the initial phase of the work stoppage but will be required to take paid time off on Friday, April 10 (Good Friday). Hourly and salary non-exempt employees will have the option to take "no pay-no penalty" April 10, and salary exempt employees may use comp time. Employees who are able to telework, such as office staff, will continue to do so April 6-9. 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. The first shipment of 75,000 units is being distributed to New York area hospitals this week.

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.

J.D.Power's pre-virus sales forecast for 2020 was 16.9 million. With possibilities of added lockdowns as the virus spreads, the April sales decline could be even worse than the industry saw in March. Volkswagen has offered no guidance on its sales outlook for the remainder of the year or on the overall outlook for 2020 calendar-year sales.

Auto sales results going forward will be affected by fear of the disease itself, vehicle production lost to plant closures, and the legal restrictions on consumer and business activity designed to fight the pandemic. As this is written J.D. Power's most recent 2020 outlook for total vehicle sales is 12.1 to 14.8 million units.

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