3% price increase from September

[ayeaye]

Salesman phoned me this morning to update me on my car, in conversation he mentioned that there was a 3% price increase due in September.
Has anyone else heard this from their dealers?

Suppose it's not too surprising as Ford announced an average 4% increase from 1st July.

[maisbitt]

They've already had a 4.2% rise in the UK, effective from the 25th Feb - greedy sods! Are they at it again?

If you have already have a contract for a new car, and have placed the order - those prices you settled on are legally binding unless the order is cancelled by either party. So beware, anyone who is having second thougts about changing spec or colour. If they cancel the order and raise a new one when a price rise is coming in, you might have to pay for the new price.

[jonallen628]

Is it still planned for the V.A.T rate to return to 17.5% early next year? I thought this was the case?

[ayeaye]

Is it still planned for the V.A.T rate to return to 17.5% early next year? I thought this was the case?

Yup - so now is the best time to buy a new VW. 3% in September then the 2.5% VAT increase in December.

[maisbitt]

Jeez - a VW will end up costing 10% more when the VAT comes back to 17.5% than it did in Jan 08 - thats too much. Why do VW feel the need to impose 2 price rises within a single year? They must be confident that their target customer is not affected by the credit crunch, and that they're willing to pay the ever increasing gap between themselves and some of the other makes (they seem to be chasing BMW on price now!).

[sashpe]

Jeez - a VW will end up costing 10% more when the VAT comes back to 17.5% than it did in Jan 08 - thats too much. Why do VW feel the need to impose 2 price rises within a single year? They must be confident that their target customer is not affected by the credit crunch, and that they're willing to pay the ever increasing gap between themselves and some of the other makes (they seem to be chasing BMW on price now!).

Probably because VW in the UK is the cheapest in whole Europe. With the currently weak pound, I was better off buying a tax-free UK car, paying for a temporary insurance, transporting it back across the continent and paying a 20% VAT at home country than just buying it from there. And I am talking about £3000 pound difference, despite the numerous complications... Use the configurator of the German website to see that a UK speced Scirocco exceeds 30kEUR. Not to mention the prices I have seen in the forum on Danish Roccos! I am not a fan of price increases but just saying that there is an obvious reason!

[maisbitt]

sashpe - you're right, the UK is cheaper than Germany for the higher specced Golfs and Sciroccos at the moment.

But for VW to push through 2 price increases in 6 months seems too much, especially as the pound has been making recent small gains on the Euro.

The pound is artificially weak at the moment - when it regains its expected exchange rate (1.4ish Euros), lets see how quickly VW drop their UK prices again.

The yanks have been getting dirt cheap VWs for years now - especially R32 Golfs, i'm sure VW make money selling them cheaply to the yanks, it just highlights how much Europe has been ripped off.

The Scandinavian countries aren't really up for debate with prices - they pay well over the odds due to heavy taxation in their own country - especially the Danes, not VWs fault.

The easiest way for VW to make their cars cheaper IMHO is to make them more reliable - my last Golf had extensive warranty work on it - a paying customer would have paid out over £5000 for the work I had done. My 2 previous VWs have also had more than a little warranty work on them. The old adage of "if only everything in life was as reliable as a Volkswagen" seems pretty defunct these days. Reliability is not my main reason for buying a VW these days- i'd have bought a dull Toyota Corolla if that was the case.

[sashpe]

Look at it the other way around - if demand is increasing, prices go up; if supply is being reduced, prices go up. For VW at the moment it's both - demand for VW is certainly not low with the new Scirocco and Golf (and Polo) and supply is struggling as discussed in other topics. So even economics can somewhat explain the rise.

In response to the suggestion of making VWs cheaper by making them more "reliable" - the average buyer doesn't really understand the goodiness of free servicing or longer warranty. What the avg buyer looks for is brand reliability and price! Servicing or repair costs are rather "abstract" terms for many when buying a brand new car. So, yes, it might help but not by much.

[danmachin]

I don't think that was what Maisbitt was meaning. If warranty costs are lower by making the cars more reliable, manufacturers would in theory be able to reduce their selling prices - attracting more customers. Unless it cost a lot more to make them more reliable in the first place!

[maisbitt]

Thats exactly what I meant Dan - I think I was a little unlucky with the last Golf, but £5000 worth of warranty work has to be absorbed by the sale price. More reliable cars means fewer warranty claims = less for VW to pay out for, so they can afford to charge less for their cars.

VW certainly aren't in any trouble like the American car firms, they're still a very profitable company, even at their current vehicle pricepoints.

I personally think VW are now chasing BMW and Merc in the brand image stakes (as well as treading on Audi's toes in some cases - who'd buy an A3 over a Golf, if not only for badge kudos - the golf is a far better looking model with more fitted at the same pricepoint), and prices are going up as a result.

Some companies charge big money for something purely on image - just look at von dutch t-shirts! Why do they charge £30 for a plain T-shirt? They're stll made for pennies in far-east sweatshops, with similar quality materials to a £10 adidas shirt. They don't cost any more to make, but people think they're better because they're 3 times the price and some celebrity was seen wearing one. Marketing forces at work!

In these lean times, VW will be leaning on its suppliers to keep the parts costs down, so I doubt their operational costs are spiralling upwards - there's very little to justify 7.5% rise in VWs prices within 6 months if this reported Sept price rise kicks in.

[JMcQueen]

So that 28k well spec'ed Golf GTI becomes nearly 30k next year

I'd sooner save a bit more and get a second hand M3

[maisbitt]

I think VW need to look at where they are in the grand scheme of things. If they're edging to BMW/Merc prices, but the brand image doesn't put them at BMWs level or above, people will buy the BMW/Merc.

Brand image isn't everything though - the 1 series is unworthy of the BMW badge, and a lot of people know it, with it's cheap and nasty interior and poor levels of equipment. It is the BMW for people that can't afford a BMW.

[JMcQueen]

The problem I see with VW is that their prices are not excessive for the base car but increasingly more things are becoming options and their options are quite expensive. £1650 for leather which is 60% vinyl, £1000 for xenons is more than Aston Martin charge. So add xenons and a few smaller options like the dynaudio, 18" Monzas, metallic paint and parking sensors and a 3 door GTI DSG is at 26k. Once you get into that price bracket, theres a lot of good quality 6-12 month old cars available.

[maisbitt]

Although i'm a pretty loyal VW customer (5 new VWs), there are limits to my loyalty, and these prices are pushing it a little.

Luckily, the Scirocco is pretty well equipped for my needs, the only extra I wanted (and got) was the parking sensors. Metallic paint is not so much of an extra, it's totally dependent on your taste. For the Scirocco you only have 2 choices if you exclude the metallics, and VW don't charge any more for their metallics than the other brands do.

JmcQueen is right about the options prices - there is no way i'd ever pay £1600 for leather seats, you can get a very good leather sofa than that, which is made from better leather than you'd find on a VW car seat.

When you look at Xenon lighhts and their components, I can't see how these cost £300 more than the standard Halogen set-up, but £960? Who says the Germans have no sense of humour?

VWs are better equipped than they used to be, but they always seem slow in the uptake of standard equipment - multifunction steering wheels are only just becoming standard in many VWs, yet basic Fiat Puntos have had them as standard fit for 3 years (VW have had them available as a costly extra for a number of years though, and they've been standard on most Seat Leons for a long time too).

I always buy new VWs because the dealers nearly new prices are a joke - who'd pay £600 less than list for a 4 month old Golf demonstrator with 6k miles on the clock? Not sure, but theres one in my local dealers right now. I'll always battle hard for at least an 8% discount and a decent part ex price.

[Xcal]

and VW don't charge any more for their metallics than the other brands do.

It depends on the country. In The Netherlands we pay €550 for anything other than candy white (€195 for salsared).

[gossa]

It is thought that when the VAT goes back up (and it definitely will), it might go to 18-20% not back to 17.5%.

The £ has recovered reasonably well against the $ so i'm sure it will perk up against the Euro but what manufacturers do with the prices is anyones guess, I doubt they'll be in a hurry to drop the SRP.

[ASBOST]

Ford done this too!! They actually had TWO price increases in 6 months.....the "Bargain Supercar" RS with just metalic metalic paint is now £26,145. Add one or two half decent extras and your looking at well over £27,000....for a Focus??? Even the ST's went up by over a grand. Roberry. As a result Ford lost a good customer and hope that VW don't price themselfs out of the game either.

Will the Scirocco R go the same way? I wonder!! Hope not

[mark_mcd]

Just to confirm - does this mean that you would only be affected if you order your car in September or later or is it the pick up date that determines it? Also Does anyone have the actual date of the increase?

[ayeaye]

Just to confirm - does this mean that you would only be affected if you order your car in September or later or is it the pick up date that determines it? Also Does anyone have the actual date of the increase?

From the price list booklet:

Prices and specifications
The prices and specifications contained in this brochure are for information purposes only as our products are continually updated and changes may be
made to the prices and specifications at any time. If you require any specific feature, you must consult your authorised Volkswagen retailer who is regularly
updated with any change in specification. Prices and specifications are subject to change without notice.
Following the announcement of a price increase, any vehicle order which can be accepted into the factory production system before the effective date
of the price increase will be supplied at the current price, even if built and delivered after the date on which the increase became effective.

So on that basis you would pay the price before any increase as long as the car is on the system and you could probably argue that if the VAT rate changes once your car is on the system, it shouldn't affect you.

[Spiney]

I believe that this is true for anyone affected by a price increase but I think they'd argue that if (when) the VAT rate changes, that is not a price increase, it's a tax change.