How to finance a Volkswagen

There are several financing options to consider if you've got your eye on a Volkswagen vehicle.

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Volkswagen is a highly popular German automobile maker, which sells vehicles at a huge range of price points.

There are several financing options for motorists who want to pay for their vehicle in instalments. Volkswagen Financial Services has a range of finance products, while there are plenty of third-party lenders to consider as well.

Below, we explore all of the financing options available, so you can decide which is most suitable for you.

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How can I finance a Volkswagen?

When deciding how to finance your Volkswagen, ask yourself whether speed or low interest is your biggest priority.

To get on the road quickly, you’re best off selecting one of Volkswagen’s finance car products. However, the cheaper option for most people tends to be taking out a car loan from a bank, credit union or online lender.

These third-party loans tend to be time consuming to arrange though. After all, you’ll need to compare lenders and fill out several pre-qualification forms to see what rates and terms you’re eligible for.

What options does Volkswagen offer?

  • Hire purchase. With this deal, you pay a 10% deposit, then cover the rest of the cost using fixed monthly repayments. You can choose a loan term to suit you, between 12 and 60 months. At the end of your agreement, you own the car.
  • Lease purchase. With this deal, a portion of the car’s value is deferred until the end of your agreement, meaning your monthly repayments will be lower than with hire purchase. Once you make this larger final payment, the car is yours. You may be given the option to refinance this final payment too.
  • Solutions Personal Contract Plan (PCP). This deal is a mix between a hire purchase and a lease purchase, as you’ll pay a deposit and larger deferred final payment. At the end of your agreement, you have the option to pay the option-to-purchase fee and keep the car, part-exchange it or give it back with no further payment.
  • Contract Hire. A straightforward hire agreement, where you select the term, make monthly rental payments and return the vehicle at the end of the contract period.
  • Finance Lease. Volkswagen offers two more complex hire agreements. With a Full Payout Lease, you must sell the car to a third party at the end of your agreement. You’ll have 90% of the proceeds returned to you as a refund of your rental payments. A Balloon Lease works similarly, although you’ll make smaller monthly repayments and a large lump sum payment at the end of your agreement. The percentage of the proceeds paid to you may differ depending on your deal. In both cases, the “third party” is usually your Volkswagen retailer.

What third-party options are there to finance a Volkswagen?

  • Car finance companies. Third-party car finance companies will be able to offer you a good deal for your Volkswagen. With most deals, you’ll use the vehicle as collateral on your loan, meaning your car will be repossessed if you fall behind on your repayments. Unsecured loans may be available, but these tend to come with higher interest rates and less competitive terms.
  • Volkswagen dealership finance. Volkswagen dealerships may offer different finance deals to those explained above. Dealership staff will be able to explain the differences for you.
  • Personal loans. A personal loan could be used to buy a Volkswagen, especially if you’re looking to cover the cost of other expenses as well as your car. You could secure a better rate by using the car as collateral or adding a guarantor. Unsecured loans could be available from some lenders, but the rates won’t be as competitive.

What is the warranty on a new Volkswagen?

When you buy a new Volkswagen, you’ll receive a comprehensive warranty to cover you against defects and repairs for the first three years. This consists of a 2-year unlimited mileage warranty, then a further 1 year or 60,000 miles (whichever is soonest).

Vehicles that are part of the Das WeltAuto used car programme receive a 12-month warranty. Extended warranties are available for new and used cars. Terms apply.

Average insurance costs for driving a Volkswagen

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