Volkswagen Jetta lease from just £25 a month as VW struggles to make US sales

Volkswagen are trying very hard to make sales in the USA, with lease deals for the VW Jetta being offered from as little as £25 a month to grab buyers.

From this side of the Pond, Volkswagen is seen as a mainstream car maker that offers that bit more than the rest, with the distinct impression that VWs are somehow better engineered and better built than cars from, say, Ford or Vauxhall or Hyundai. But it’s not like that in the USA.

The recent fallout from the resignation of Ferdinand Piech highlighted that all is not well at VW, and it’s thought one of Piech’s beefs with Martin Winterkorn is over VW’s failure to make progress in the US market, a market that seems to view VW as rather dull and unappealing – certainly not in the same league as Toyota.

That gives VW a big mountain to climb, especially in a rising market where VW sales have actually dropped in the US, and both VW and its dealers seem to be getting a bit desperate to make sales.

Bloomberg are reporting that it costs an average of just £58 a month to lease a Jetta – VW’s Golf with a boot – after a down-payment of £1640, with the best offer they had from a VW dealer in San Jose at just £25 a month. Probably less than you’d pay for a Smartphone contract.

Clearly, VW are struggling, but are give-away prices the route to big sales, or does it just devalue the brand further in the eyes of US buyers?

VW argue that by getting lease buyers in (at any price, it seems) they’ve got a loyal returning customer base who can then be tapped for a more profitable deal when their lease is up in two or three years, by which time VW hopes to have more appealing products.

But it seems a dangerous game, is sure to depress used prices when the cheap lease deals hit the second-hand market which, in turn, will make subsequent lease deals harder as residuals will be depressed.

Perhaps Ferdinand Piech had a point?