up! – Driving Presentation

. In launching the up!, Volkswagen has not only put a new car on the road, but has also redrawn the parameters for financing, insurance and maintenance. AutoCredit2 is the name of the new finance scheme, which, thanks to an adaptable arrangement of down payment and instalments, brings a new flexibility to car buying. Substantial cost benefits – in some cases of up to 1,700 euros a year – are also provided by the new FairPay insurance scheme, which, like the instalments for AutoCredit2, is paid monthly. Via the third up!grade module – also based on monthly instalments – servicing costs for the up! can also be covered. All 3 modules together form the up!grade package. These flexible finance terms and inexpensive ongoing costs for insurance and servicing make purchasing a new car on a small budget more achievable than ever. Volkswagen will initially be offering this package in Germany, while it has already been agreed that adapted versions will follow for the UK, France, Italy and Spain. Details for the launch market (Germany) are:

AutoCredit2. The finance scheme allows two different instalment rates to be agreed during the term of the loan (a 12 or 48-month period in total). At the end of the period, the up! is simply handed back to the dealer or acquired by the customer after making or financing the balloon payment and discharging the final instalment.

FairPay. Under the FairPay name, the Volkswagen Bank is offering an affordable, fixed monthly price for insurance. A price that stays the same even in the event of a claim. Rates are available for the launch of the up! starting from 9.90 euros a month (up to and including 1st December 2011). The cover offered includes general liability insurance (100 million euros cover plus accident and breakdown services), comprehensive insurance (300 euros excess), third party, fire and theft (150 euros excess) and damage protection abroad. From 2nd December, the lowest rate will be an attractive 19.90 euros per month.

Servicing. Where this module is taken out all services (as per the service schedule, excluding cambelt changes and repairs due to wear and tear), all oil changes including filters plus all changes of spark plugs, air, pollen and fuel filters and brake fluid are covered for the agreed term of the finance deal. Per service Volkswagen will also provide a courtesy car for a one-day period. How this all works is illustrated by two examples based on the German market:

Example 1 – first-time driver (20 years old)

Situation: Has just started work. Age: 20. Has held a driving licence for 2 years. New car: the take up! in base specification with ESP as standard and delivering 44 kW / 60 PS, painted in the colour "red" (extra charge: 135 euros). Price: 9,985 euros. The up! is his/her first car. As the customer has not had a car before, he/she would normally get classified for insurance in the least favourable no claims category. In Germany, this would result in average insurance costs of 2,184 euros per year or 182 euros per month for the engine size of the up!. Under the umbrella of the up!grade package this costing works out very differently: here the insurance costs for novice drivers, subject to taking out the policy by 1st December 2011, are just 39.90 euros per month. A saving of over 1,700 euros per year! After 1st December this year, the cost for first-time drivers will still be an extremely affordable rate of 49.90 euros per month.

The new take up! is being financed via AutoCredit2. The term is 48 months. Down payment: 1,500 euros (at least 15% of the vehicle price). Our young driver also decides to pay a lower rate in the first 24 months, as the salaries of people starting out in their career are, of course, somewhat lower and over time generally increase. During the first 24 months, this results in a rate of 77.20 euros for the finance and in the second 24 months instalments of 118.20 euros.

As the third building block our purchaser also opts to add cover for servicing costs into the up!grade package: 11.90 euros per month. In the first 24 months that means – for finance, insurance and servicing costs – a monthly instalment of 129 euros and in the second 24 months of 170 euros. The effective annual interest rate in this case is 3.90 per cent and the balloon payment on taking ownership of the take up! 4,867.69 euros. The highlight of this example: in terms of insurance alone this gives the buyer a price benefit of 6,820.80 euros! The monthly costs of example 1 in summary:

AutoCredit2, months 1 – 24: 77.20 euros
AutoCredit2, months 25 – 48: 118.20 euros
FairPay insurance: 39.90 euros
Servicing: 11.90 euros
Total instalment, months 1 – 24: 129.00 euros
Total instalment, months 25 -48: 170.00 euros
Average total instalment: 149.50 euros

Example 2 – young woman (26 years old) with baby

Situation: A woman in Germany, who will initially be at home for two years to take care of a baby and then aims to go back to work. Age: 26. Has held a driving licence for 8 years. New car: the move up! delivering 44 kW / 60 PS and including maps+more (radio, CD/MP3 player, navigation system and other features) and the "plus" drive pack (urban emergency brake function, cruise control, multi-function display and ParkPilot). Price: 12,085 euros. As the young lady has never had an accident, she falls into a favourable no claims bracket (SF8). In the engine size category for the up! these parameters would normally produce average monthly insurance costs of 54.70 euros. In the case of FairPay insurance from the Volkswagen Bank, however, things look rather different: as a component of the up!grade package the insurance costs come down to just 9.90 euros per month!

In this case, the Volkswagen is also being financed over 48 months. 2,417.00 euros (20 percent of the vehicle price) is being invested as the down payment. Here again, the buyer has opted to pay lower instalments during the first 24 months, as during the second 24 months she will be back at work and thus have more money at her disposal. For the first 2 years, this results in a rate of 88.20 euros for the finance and in the second 2 years instalments of 146.20 euros. On top of this, there is FairPay insurance for 9.90 euros. As in the first example, servicing costs 11.90 euros per month. Over the first 24 months – for finance, insurance and servicing costs – this results in a monthly instalment of 110 euros, and during the second 24 months, 168 euros. The effective annual interest rate is once again 3.90 per cent, and the balloon payment, if the woman intends to keep the up!, will come to 5,891.14 euros. Making the balloon payment will, in any case, come more easily than usual, as the customer has saved a total of 2,150 euros through the FairPay insurance alone.

AutoCredit2, months 1 – 24: 88.20 euros
AutoCredit2, months 25 – 48: 146.20 euros
FairPay insurance: 9.90 euros
Servicing: 11.90 euros
Total instalment, months 1 – 24: 110.00 euros
Total instalment, months 25 -48: 168.00 euros
Average total instalment: 139.00 euros

Notes:
TDI, TSI, DSG and Twincharger are registered trademarks of Volkswagen AG or other companies of the Volkswagen Group in Germany and other countries.
Features and technical data apply to models offered in Germany. They may differ in other countries. All fuel economy and driving performance data cited in this press release are forecast values as of September 2011.