Good car finance offers prompt growth even in poor Q2

Poor sales results in April and May mean it’s down to June to pick up the slack in what will be a tough quarter for dealers looking to hit targets.

Big buying decisions tend to be put off when it comes to election time and the effects of the result may still be felt towards the end of this month as things settle down.

It’s always interesting in a bad month to look at who is still making gains and part of that success has to be down to offering convincing retail offers that persuade consumers to buy.

Volkswagen Group brands Škoda, Seat and Porsche have all posted impressive percentage increases where most other brands have dropped double digits.

Škoda saw growth of 9% in May, to 6,713 units and the brand has a really strong mix of offers and price points for customers to take advantage of. These include 0% deals on the entry-level Citigo, one of the most affordable cars to finance in the UK at just £135 a month after a £751.72 deposit.

The 0% deals at Škoda are spread across models, such as the Rapid, Rapid Spaceback and Yeti. Škoda’s more aspirational products, such as the Superb and Kodiaq, attract a higher APR, at 4.9% and 5.8% respectively, but these cars are desirable enough to warrant a bit of a premium. It also shows confidence in the new Kodiaq that it is not being rushed out of showrooms on a cutthroat finance offer.

Core product, such as the Octavia, is at 2.9% at an affordable £229 a month. These deals are clearly hitting their mark with buyers in what has been a slow month for the retail market.

Sister-brand Seat saw its registrations increase even further at 11% to 3,882 units. There’s only one 0% deal with the Spanish carmaker, on the Alhambra. Surprisingly, there are no other super-low-rate deals in its range, with 6.5% APR on its entry-level Mii. However, this higher rate is due to the low deposit of £146 and monthly payments at the same price. The finance house and dealer has to make a margin somewhere.

There is no vehicle in Seat’s line-up that will cost a customer more than £270 a month in the examples given, making the entire range accessible to the average buyer.

Porsche’s sizeable 24.9% increase in May registrations to 1,278 units just shows how the premium sports market is insulated from traditional market pressures. But it’s not just a silly jump, it’s actually backed up by some strong deals designed to conquest sales.

A Cayenne diesel for £265.28 a month opens up the brand to a huge market of customers and shows that while the car divides Porsche enthusiasts it still works as an entry point for the brand. There is a £15,500 deposit, but if you’re trading in a decent mileage high-spec volume car and fancy being a Porsche owner for the first time, the offer is there. The same goes for the smaller Macan at £373.46 a month. Suddenly owning a Porsche doesn’t seem that unattainable.

There are of course the 911 Carrera S and GTS Cabriolet, which get into pricier territory, but the APR on those deals is actually lower than on a Seat Ibiza in Q2.