Skoda will guarantee resale value if you get your loan in-house

Skoda Australia is banking on buyers choosing their in-house finance option – and if they do that, there's a guaranteed trade-in price waiting at the end of their loan.

The company’s Guaranteed Future Value program is part of a renewed focus to be seen as a value-oriented choice for consumers – particularly now, when every dollar counts.

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According to Michael Irmer, Skoda Australia managing director, this offers a big plus for customers who think beyond the attractive drive-away pricing and may be concerned about the resale or residual value.

“This is a relatively new concept to the Australian market; it has maybe gone through exactly one buyer cycle so far. We at Skoda, we’re having 20 percent take-up,” Irmer said.

“You might be thinking ‘that’s not much’, but it’s actually quite good, more than most other players. But is there more potential? Absolutely.”

The brand’s boss said in Australia and other markets, about 70 to 80 percent of new-car customers are seeking finance in one form or another, be it drawing from a mortgage or offset account, getting a loan from family, or taking out a car loan or personal loan from a bank.

Car dealership financing, Irmer said, perhaps isn’t considered as solid an option, given some unscrupulous dealings by OEM financial services businesses in the past.

“Car dealership financing is only getting a portion of this in Australia at the moment – it has to do with some of the history and the legacy of that industry, which was largely unregulated until recently,” he said.

“Regulation has improved, but there’s a lot of damage done to the perceptions. It’s not the first port of call to go to the car dealership for buying finance, because they've been exposed to a lot of bigotry and negative surprises – balloons set too high, so that you’re in negative equity. Things like that. Or no guarantee for your residual value. Or [varied percentage] rates for risk assessment."

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Mr Irmer said ambiguity in the terms and conditions of some loans was something Skoda Australia had aimed to negate with its clear and simple plans.

“We want to take that all away with this program. In the UK, for instance, roughly 70-80 percent of buyers buy with this program. But in Australia we come from a different starting point, so it will not get to that high level anytime quickly, but we want to evolve it further.”

Skoda will soon launch its first EV model in Australia – the Enyaq SUV - which will be the most expensive Skoda ever. But, as has been evidenced in some other cases, the Enyaq could see a better residual value as a result of the ‘early adopter’ EV phase having passed.

Mr Irmer said the brand understands the level of uncertainty in buyer’s minds when it comes to EV resale values.

“Where it becomes really important is with electric cars,” he said. “There’s one thing that is unique [compared] to the ICE cars – the purchase price is a bit higher, but it comes with lower running costs.

“But for a consumer, there are two other things which are really important. One is, how is it going to be with selling the car in a couple of years – especially when you see the news coming from the UK, the Americas or from Europe, people are a little bit fearful [of EV resale values].

“What is it going to be, how is it going to be with the battery and the quick advances in technology?” he pondered.

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“So then it is a really good thing to have such an asset [as GFV], and such reassurance that somebody taking the leap going into a BEV at least being protected from any surprises there. It’s even more important than in the ICE vehicles.

“Technology advances, and battery [improvements] are much faster at the moment. And that means it maybe also makes sense for many consumers to say ‘I want to be ready to transition maybe in four or five years’, and with the GFV program you can really easily do it,” said Mr Irmer.

The Skoda Enyaq EV range will launch in October 2024, with the standard Enyaq ‘85’ with a single-motor layout and the dual-motor AWD Enyaq RS hitting the road then. Pricing for both is still to be confirmed, but both will come highly specified, and at launch, each will solely be offered in the Coupe-style body design.