How To Refinance A Volkswagen Car Loan

How To Refinance A Volkswagen Car Loan

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated January 10, 2023

If you currently have a car loan for your Volkswagen and are looking to reduce your monthly payments, refinancing may be an option.

Refinancing involves taking out a new car loan to replace your current one. The idea is to lower your car payments, reduce what you owe overall, or extend your loan term to make your installment payments more manageable. 

Keep in mind, refinancing only makes sense in certain situations, and you’ll need to qualify for a new loan to replace your old one. Read on to find out how to refinance your Volkswagen auto loan to save. 

Can I Refinance My Volkswagen Car Loan?

Yes, you can refinance your Volkswagen auto loan, as long as you can qualify. Generally speaking, you should refinance your car loan if you think you can secure a lower interest rate. For instance, if your credit score or income have improved, you may be eligible for a lower interest rate. 

You typically have two options to refinance your Volkswagen car loan:

New Car Loan 

You can refinance your current car loan by taking out a new car loan to replace your existing loan. Just ensure that your new loan comes with better terms than your previous one. Once, you’re approved, you’d simply use the new loan to pay off the old loan. Do note, some lenders may charge a prepayment penalty fee, which can cut into your savings. 

Personal Loan 

Rather than applying for a car loan refinance, you could apply for a personal loan for an amount that would completely cover your current outstanding car loan. If you can get approved for a personal loan at an interest rate that’s lower than the rate you’re currently paying on your existing Volkswagen car loan, you could save money in interest over the long run.

What Happens Near The End Of My Volkswagen Finance Auto Loan?

When you finance your car with Volkswagen and approach the end of your contract, you have two choices:

  • Keep the car and own it outright with no car loan
  • Trade it in for a new one   

If you leased your Volkswagen, you have three options: 

  • Keep it and refinance the remaining balance 
  • Upgrade to a new model
  • Return it

Volkswagen Financing Options

Volkswagen offers various options when it comes to how you pay for your vehicle. Here’s how each option breaks down in terms of cost, payments, and ownership:

VW Select 

  • Cost: With VW Select, you can borrow the full purchase price of your car, as well as extra to cover additional costs, such as accessories and fees. 
  • Ownership: You are the owner of the vehicle, as long as you keep up with your monthly payments. You’ll have full ownership after you’ve made your last installment payment along with the lump sum VW Select payment.  
  • Payments: You pay off the contract value with regular installment payments over a fixed term. The agreed-upon end-value amount is payable by the due date of your last installment. Your installment amount can be decreased by making a large down payment at the time of purchase. 

Financing

  • Cost: When financing, you can borrow the full purchase price of your car, as well as extra to cover additional costs, such as accessories and fees.
  • Ownership: You are the owner of the vehicle, as long as you keep up with your monthly payments. You’ll have full ownership after you’ve made your last installment payment. 
  • Payments: You pay off the loan with regular installment payments over a fixed term. To reduce your installment payments, you can make a bigger down payment at the time of purchase. 

Leasing 

  • Cost: When you lease your Volkswagen, you make regular payments based on a pro-rated amount, plus other costs, such as accessories and fees. 
  • Ownership: You don’t own the vehicle when you lease it, even if you keep up with your payments. However, you have the option to buy the vehicle once your lease agreement ends. 
  • Payments: You’ll make regular payments for use of the vehicle for a fixed term. When the lease term ends, you have the option to buy the vehicle at a pre-determined price. You can reduce your lease payments by making a bigger down payment when you first lease your vehicle. 

Contact Information For Volkswagen Finance Auto Loans

There are a couple of ways to get in touch with Volkswagen Finance:

  • Telephone: 1-800-668-8224
  • Email: info@vwfinance.ca

To contact the Privacy Officer, choose from one of the following: 

  • Telephone: 289-255-0403
  • Email: vcciprivacy@vwcredit.com
  • Mail: #500-1340 Pickering Pkwy, Pickering, ON L1V 0C4

Volkswagen Finance is available from 8 am to 9 pm EST, Monday to Friday.

How To Lower Interest Rate On A Volkswagen Finance Auto Loan

Your Volkswagen car loan payments are determined not just by the price of the vehicle, but also by the interest rate you’re offered. The lower the rate, the more affordable your auto loan will be. Your goal is to secure the lowest rate possible.

Luckily, there are a few effective ways to reduce your rate.

Improve Your Credit

One of the best ways to lower your interest rate on your car loan is to have a high credit score. When you apply for any type of loan, your credit score is one factor that determines your ability to snag a competitive rate. 

If your score is a little low, take some time to give it a boost. You can work to improve your credit by..

  • Paying all your bills on time
  • Being conservative with your credit card spending
  • Not applying for too many loans

Compare Offers

There are tons of lenders out there ready to make you an offer on a car loan. Your job is to compare what these lenders have to offer, including their interest rates. Doing some comparison shopping can go a long way in helping you find the best deals

Apply With a Co-Signer

If you can’t secure an affordable rate, consider adding a co-signer to your loan contract. 

A co-signer is someone with good credit and a healthy income who promises to make loan payments if you fail to make them yourself at some point. This reduces the risk for the lender, who may reward you with a lower rate as a result. 

How To Lower Monthly Payments For A Volkswagen Finance Auto Loan

Your Volkswagen car loan payments should fit comfortably within your budget. You don’t want to struggle to make payments every month. Volkswagen offers a few rebate programs and offers to help shave a few bucks off your purchase and ultimately lower your payments:

Loyalty Program 

Whether you finance, lease, or buy your Volkswagen outright, you’ll receive 2 years of complimentary maintenance.

Mobility Program

You can customize your Volkswagen to accommodate any mobility issues you may have with things such as carriers, lift equipment, hand controls, and other assistance equipment. Volkswagen can provide you with up to $1,000 toward the purchase of any of this equipment through the Mobility Discount.

Graduate Program

If you recently graduated from a post-secondary institution and you finance or lease a certified used Volkswagen, you can take advantage of a rebate of up to $500 to be applied to your transaction. To be eligible for this rebate, you must meet the following criteria:

  • You graduated no more than 24 months before the date of your loan application
  • You are permanently employed or have firm commitment for a job
  • Your school is located in Canada or the US and meets specific criteria

What Happens When You Miss a Volkswagen Finance Auto Loan Payment?

Missing a loan payment can cost you in more ways than one. Here’s what can happen if you miss a payment, depending on how much time has passed since the payment due date:

Less Than 30 Days Late 

Generally speaking, car loan payments that are less than 30 days late will come with a warning from your lender to make up for the payment as soon as possible. Depending on the terms of your loan contract, you could also be slapped with a late payment penalty fee. As long as you make up for the missed payment within 30 days following its due date, no further action should be taken.

More Than 30 Days Late 

If your missed payment is more than 30 days late, you’ll deal with more serious consequences in addition to a penalty fee, depending on how long the payment is overdue:

Your Credit Score Could Take a Hit 

If your auto loan payment is over 30 days late, the missed payment will be reported to the credit bureaus. When this happens, a note about the missed payment will be added to your credit report and can remain on your report for up to 6 years. In the meantime, your credit score will dip, which will have a negative impact on your personal finances. 

Your Vehicle May Be Repossessed

Your car isn’t technically yours when you finance it. Instead, your lender places a lien on the title until you pay off your car loan in full. Until then, the lender has the right to repossess the vehicle if you default on the loan. If you’re 60 to 90 days late on a loan payment and fail to make up for it, you risk having your car repossessed. 

Volkswagen Finance Auto Loan Repossession Policy

Lenders don’t usually start the process of vehicle repossession until your loan has been delinquent for 60 to 90 days, as mentioned. However, vehicle repossession may occur before or after this window of time, depending on your exact circumstances. 

If your Volkswagen is repossessed, you may have some options to get it back. For instance, you can make up for the missed payments, or try negotiating with the lender to secure more affordable terms or a different payment plan.

How To Voluntarily Surrender a Volkswagen Car

Vehicle repossessions are considered “involuntary” since you’re not giving up the car on your own accord. But you may also consider a “voluntary” repossession instead if you can no longer afford your payments.

Voluntary repossession involves returning your vehicle to the lender without them taking it from you. You may consider surrendering your vehicle voluntarily to avoid some of the extra fees the lender may charge if they had to pay a repo company to collect the vehicle from your home. You can also avoid having a collection agency come after you to collect the missed loan payments. 

Voluntary repossession may also help you maintain a good relationship with the lender in case you choose to apply for a new loan in the future once you’ve gotten a better handle on your finances. 

To voluntarily surrender your car, let the lender know that you can’t repay the remainder of your outstanding loan balance and arrange a time and place to drop the vehicle off. 

Volkswagen Car Refinancing FAQs

What will a new Volkswagen cost me?

The price of your new Volkswagen will depend on the exact model you’re purchasing. The final price will also be based on where you live, special promotions, and any extra features you add.  Generally speaking, a new VW in Canada can cost you anywhere from $26,695 for a 2023 Taos to well over $50,000 for a 2023 Atlas with add-ons. 

Does Volkswagen Finance offer 0% financing?

You’ll need to keep an eye out for advertised 0% financing from Volkswagen dealers in your area, as these types of offers are not common. If you do come across a 0% financing offer from a VW dealership, there are a few things to consider.  For instance, 0% interest may not apply to the entire loan term, and it may only be available with specific models. You may also be required to have excellent credit to take advantage of this offer. 

How long does a new Volkswagen Financial warranty last?

The VW vehicle warranty lasts 4 years or 80,000 km, whichever comes first. Wear and tear items and adjustments are excluded after the initial 12 months or 20,000 km.

Final Thoughts

Refinancing your Volkswagen car loan may be a great option if you’re looking to reduce your monthly payments. However, make sure that you can qualify for a better rate before refinancing, and crunch the numbers (including the cost to break your original car loan) to find out if refinancing makes financial sense. 

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

Borrow $500-$50,000

Borrow $500-$50,000
NEW!

Don’t pay until March with this offer from our partner, Fairstone.* Ends January 31st.

View Offer
Cashback & Bonus Offer

Cashback & Bonus Offer
Ends March 1st, 2023

New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.

View Offer
Earn 5% Cash Back With Neo

Earn 5% Cash Back With Neo
No annual fee!

Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.

View Offer
Build Credit For $10/Month

Build Credit For $10/Month
Popular

With KOHO’s prepaid card you can build a better credit score for just $10/month.

View Offer
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.