Volkswagen will limit its dealers’ ability to mark up rental rates starting next month, according to letters sent to dealers yesterday. The move will limit “dealer participation” on leases to just 1%, which could make it easier for car buyers to get a better lease on a new VW or Audi in 2022.
When the new rule takes effect on March 1, the profit margin for dealers on leases through VW Credit will be limited to 100 basis points, up from 300 basis points previously. This equates to a 3% to 1% drop above the captive lender’s official rental rates. Expressed as a monetary factor, this is a reduction from 0.00125 to 0.00040.
Audi Financial Services is making the same change on fixed-term leases. For both brands, the limit on dealer profit margins will match what lenders are already doing on retail purchase contracts. Based on the language used in letters to dealers, there may be good reasons for the changes.
For example, VW writes that it “takes fair lending seriously in all aspects of our lending practices and wishes to protect the company, brand, dealer and consumers from any harm that may result from our policies and practices.” . He also adds that he operates under the supervision of regulatory bodies.
VW’s offerings aren’t nearly as good as they used to be. There are no APR incentives on the brand’s 2022 lineup, and the brand removed rental prices from its website a month ago. This time last year, the Atlas SUV was offering up to $4,400 off rental and a rate equivalent to 2.9% APR. Now, there are no agreements to speak of.
If you’re looking to get a fair price on a lease, next month’s change could be a good thing. However, this raises the question of whether or not dealers will simply look for other ways to make up the difference. Whether it’s in the form of a higher car price or expensive accessories, the answer can vary from dealer to dealer.
A VW spokesperson did not immediately respond to a request for comment.
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