Scirocco R lease deal

I've seen that. The Golf R deals last year and now these.

Surely these deals lose money?

Let's say these are £25k rather than £32k. £2400 brings that down to £22.6k credit.

You pay £156 x 23 = £3588.

So average balance is about £20.8k over 2 years.

Interest on that at 3% is ~£1200.

Which means the company providing the car has costs of

£25k + £1200 - £6k = £20.2k.

Car residual value is around £19k.

So unless they pay sigificantly less than £25k (initial outlay + interest is reduced) they can't make much money at best. 3% is also a pretty good financing rates for most companies so that could be worse.
 
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These companies are not buying the cars they are just brokers. They are almost certainly manufacturer funded as it generates a supply of low mileage used cars for the dealer network.
 
[TW]Fox;28472816 said:
These companies are not buying the cars they are just brokers. They are almost certainly manufacturer funded as it generates a supply of low mileage used cars for the dealer network.
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I know but at a loss? I guess you could knock the £25k assumption lower if it is the manufacturer funding it as the marginal cost price I am guessing is a fair bit lower.
 
The point I am making is the only relevant cost is the effective purchase or start "cost" point (which we just dont know )vs end value.

The cost of finance is not relevant as the user will always cover that.


I know you're just trying to make sense of the numbers but you simply don't know enough of the facts. We could go round making up several scenarios and figures

It's also possible the manufacturer is happy just to break even and make money elsewhere once the cars are in distribution.
 
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Well the opportunity cost is what matters. What could they have sold the car for. That we can estimate reasonably. However, as posted above if their is spare capacity, the marginal cost becomes more important, which can be lower.

The cost of finance is very relevant if you are actually doing the calculations. The customer is paying £156 in this deal, the question is whether that and the deposit covers the cost of capital and depreciation and that is what the calculations above do.

For the record your original posts were implying that I was somehow using the list price. You have only now provided a post in context with the prior posts.
 
To be fair, there's not really any other way for VW to shift Sciroccos other than deep discounts. That segment is dying on it's backside, and they're not even the best seller in the segment.
 
This is a poor deal as it's lower powered BlueMotion Tech R Line model, not the R version. The power on this is 216bhp vs 260bhp on the R, along with a lower spec exterior and interior.
 
muon said:
Well the opportunity cost is what matters. What could they have sold the car for. That we can estimate reasonably. However, as posted above if their is spare capacity, the marginal cost becomes more important, which can be lower.

The cost of finance is very relevant if you are actually doing the calculations. The customer is paying £156 in this deal, the question is whether that and the deposit covers the cost of capital and depreciation and that is what the calculations above do.

For the record your original posts were implying that I was somehow using the list price. You have only now provided a post in context with the prior posts.
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The point is that they'll sell relatively few of them brand new at nearly list price. So it doesn't matter if there's an opportunity to sell at that price if nobody is buying them.

However people will buy 2 year old ones and people will lease them - so even though they might make more money selling a car at list minus discounts, they'll make a whole lot more leasing 10 cars and selling them nearly new for every 1 car they sell new
 
SDK^ said:
This is a poor deal as it's lower powered BlueMotion Tech R Line model, not the R version. The power on this is 216bhp vs 260bhp on the R, along with a lower spec exterior and interior.
Click to expand...

Says 280bhp in the link, but could be a typo I suppose.
 
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Error on the default value? Once you change something and change it back you're unable to get it lower than £378.61 + VAT
 
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