What? No $5,000 Rebate?

Sometimes people ask me, "Why doesn't Volkswagen advertise big cash rebates plus '0% financing for 72 Months' plus other deep discount promotions like many rival brands do?"

That's a good question and one I am happy to answer. Let's start with a story:

Recently a customer came to me to trade-in a luxury brand American car that he had purchased only two years before. When we did the appraisal we discovered that the car's trade-in value was only 1/3 the original MSRP of $36,000. He was disappointed to say the least, but when you consider that when he purchased this car new he received
1). a $4,000 "Employee Pricing" discount, plus
2). a $3,000 dealer discount, plus
3). a $2,000 factory rebate, plus
4). low rate financing, it becomes obvious that his $36,000 car was really a $26,000 car with $10,000 worth of "fluff" added into its MSRP by the manufacturer.

By contrast, a quality European or Japanese car (including VW) with a similar $36,000 MSRP will sell retail for $34,000-$35,000. There is no "fluff" added into the MSRP - the car is really worth the asking price. The quality of the engineering, the quality of the materials used, and the quality of the customer service attached to the brand combine to assure buyers that, not only does the car have a high value in the marketplace today, it will also have a high resale value in the future.

Think about it; if you knew you could buy a new $36,000 Mercedes (or Lexus or whatever) today for $26,000 after all discounts were applied, would you still view Mercedes as a high quality high value luxury brand car? Or would you feel that Mercedes' brand image had been cheapened?

The practice of motiviating buyers with exhorbitant discounts/rebates/low rate financing incentives is one of the major reasons big American carmakers are in the trouble they are in today. High quality, high value cars like VW begin with a reasonable MSRP, sell at a fair market price, then strive to continually deliver high value after the sale. That seems to be all the "incentive" most customers are looking for when buying a new Volkswagen. :-D