By on October 31, 2015

01 Volkswagen Jetta

Volkswagen told dealers that it would buy back some of its unsellable, used diesel cars withering on their lots at fixed prices to help dealers cope during the automaker’s growing diesel scandal, Automotive News reported.

The cars that dealers are accepting on trade-in, but can’t sell due to their illegally polluting engines, have sat on lots while the automaker develops its plan to fix 482,000 cars sold in the U.S. with the illegal “defeat device.” Volkswagen has offered a $2,000 “loyalty discount” for any Volkswagen trade-in, including diesel cars. 

According to memos obtained by Automotive News, dealers will inventory those cars until mid-November and submit those counts to Volkswagen. It’s unclear what the automaker would do with those cars and if the buyback would extend to all cars — or just older models that would need more extensive repairs.

The plan was announced at a Volkswagen dealer meeting Oct. 22, the first since the Environmental Protection Agency notified the automaker that its diesels polluted up to 40 times the legal limit of nitrogen oxides.

Volkswagen’s move to buyback the diesels would keep from those car prices from plummeting further at auction. According Kelley Blue Book, auction prices have dropped for Volkswagen’s diesel cars have dropped 16 percent since the scandal erupted.

According to the report, Volkswagen is also developing a “customer goodwill” program that may compensate owners. It’s unclear what that program will be, or how it could repay customers.

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31 Comments on “Volkswagen Buying Back Bad Diesels From Dealers At Pre-crisis Prices...”


  • avatar
    SCE to AUX

    Does this apply to every car dealer on Earth, or just Volkswagen dealers? Not everyone trades their car back to VW.

    How much are the dealers giving for trades?

    The lawyers will have to hire an army of accountants to calculate everyone’s loss in this fiasco.

    • 0 avatar
      rickety_wrecked

      My local VW dealership won’t even take my TDI on trade (this is a widespread issue, so not just my state), so I don’t know if the sites publishing these articles know what they’re talking about.

      Regarding the amounts for those taking them on trade, there is one fellow over on the TDI owners’ forum that traded his Passat in for $11,000 – it’s value pre-scandal was close to $21,000. That should give you a decent idea.

      • 0 avatar
        onyxtape

        Ouch. A friend of mine bought her used Jetta TDI 2 years ago. It had 80,000 miles on it and she paid a hefty $18k for it.

        If a financial analyst ever knew about this car purchase, his head would explode.

      • 0 avatar
        fhlh

        wow… what a dumbass. I’d kept the damn thing. Believe me, just because it doesn’t meet the epa standards, doesn’t mean you will die of cancer in the next 10 months if you are within 10feet a VW diesel.

    • 0 avatar

      We only have traded in one so far. We did 50 cents on the dollar and wholesaled it quick (despite the desire of some folks at our dealership to buy it at the crazy low price, we didn’t want to get tangled up with it)

      • 0 avatar
        Big Al From 'Murica

        Who trades it at those prices? I’d just drive my money out of it if that is how it is going down. I mean it is still the same generally reliable vehicle it was before the scandal. Don’t do the fix which isn’t coming near term anyway and keep on driving while waiting for the class action.

  • avatar
    Tosh

    Pre-crisis? Look at VW’s stock price over a 5 year span, and you’ll see that in Sep 2011 it was actually lower than it is right now. What does that tell us?

  • avatar

    2012 VW Jetta TDI MMR National Averages
    Oct 2014 – $13,027 w/57k miles
    April 2015 – $12,996 w/61k miles
    August 2015 – $11,125 w/63k miles
    October 2015 – $10,147 w/61k miles
    November 2015 – $9,725 (estimate)
    October 2016 – $3,550 (estimate)

    • 0 avatar
      eggsalad

      May be dependent on some legal issues, especially in areas with smog checks.

      If a state says “Hey, you bought this VW in good faith, we will allow you to keep registering it”, I don’t think the price hit you speculate will happen.

      If California, etc. say it is illegal to register such a car, the value will plummet faster than you predict.

      If I can buy and legally register a 4-year-old TDI for five grand, I will.

      • 0 avatar
        Kyree S. Williams

        Boy, this sure sucks if you’ve had your diesel since new, and for all of six months (this guy).

        • 0 avatar
          tedward

          I’ve seen tdi’s for sale at dealerships (ok at two, I’m shopping right now). They were used cars not certified or brand new. Also I don’t remember seeing a crazy low price.

        • 0 avatar

          Or two years. I’m not trading it for 50 cents on the dollar-I wonder what discussion went on at home…

          The fact insiders lined up to buy at that price shows that at the end of the day, the cars are still good.

          VW need to build “The Recall Edition” and swap them out. What they will do, probably for the end buyer, is NOTHING-unless the local government does some thing for them. Here in the US, VW will probably get away with writing a check and paying a fine.

  • avatar
    dr_outback

    This would never happen if VW were GM. A really classy move on VW’s part.

    • 0 avatar
      dash riprock

      VW is facing lawsuits from consumers and potentially their own dealers for the loss of value due to VW’s fraudulent actions and claims. I assume there is some real financial motivation on their part.

      • 0 avatar
        dr_outback

        Loss of value will be difficult to prove or receive compensation for. If a vehicle’s value is inflated by the market because the vehicle overachieves the EPA fuel economy ratings, then that’s market driven inflation. There is no predetermined or guaranteed depreciation amount written into a purchase contract when a vehicle is sold unless the vehicle is leased. A vehicle is a depreciating consumable and the depreciation curve is created by the whims of the market.

        • 0 avatar
          dash riprock

          Have to disagree. Loss of value is going to be easy to prove. They have historical data on the depreciation of the same vehicles going back years. Easy to compare to what is todays and tomorrows market realities.

          Either VW is really generous to the consumers, wholesalers, and dealers with the TDI’s or the courts will force them to be

          • 0 avatar
            Tosh

            Either VW is really generous to the consumers, wholesalers, and dealers with the TDI’s, or the courts will force them to be generous to the class action lawyers. (fify)

  • avatar
    dr_outback

    Making a manufacturer solely responsible for the depreciation curve of a used vehicle sets a dangerous precedent. Next owners will sue manufacturers for “loss of value” when a new model releases and drives down the value of the previous model.

    There is no evidence that when the affected TDI’s are brought up to spec that the modifications will make any noticeable difference with driveability. Would it be fair for a court to hold a manufacturer of vehicles with poor fuel economy responsible for higher depreciation when fuel costs rise and catches the consumer unaware?

    • 0 avatar
      George B

      I disagree. If making TDI models compliant had no downside, Volkswagen would have implemented a software update by now. Their actions suggest that consumers would not like the change. The fact that they were unable to get EPA certification for new models with urea injection plus the presence of TDI models built without the front fascia installed suggests new hardware. My guess is that Volkswagen needs both urea injection plus something like a larger intercooler or different exhaust hardware to meet EPA requirements.

      The other data point that suggests meeting EPA emissions requirements is expensive for a diesel car is the lack of inexpensive diesel cars in the US market. General Motors built a diesel Cruze, but I’ve never seen one in the wild.

      • 0 avatar
        Scoutdude

        You are correct that making them compliant will have downsides to the consumer. The fact that they issued a new cheat to try to fool CARB shows that clearly.

        At this point anything they do they will have to do right which means full life cycle testing because they know that the EPA and CARB will thoroughly scrutinize the emissions performance including spot checks in the future.

        The ones that are incomplete are not incomplete to add more parts they are incomplete so they can convert them to non US spec should it take too long to get the proper fix done.

    • 0 avatar
      Pch101

      It’s probably not a performance issue, but a cost issue.

      The hardware that is needed to reduce NOx to US levels would have cost more money. I would guess that would have included a urea system and a more costly catalytic converter. Those costs can’t be passed on the customer, so that means less profit (or more losses) to the manufacturer.

      (I could be wrong about this, but my guess is that the defeat software would have been designed to produce bogus readouts for the testing equipment without actually reducing the emissions.)

      More to the point, VW probably did not want to make a special US-spec motor that was fundamentally different from what it was offering in Europe due to the added cost of developing and producing two very different variants. The Europeans allow higher NOx levels than does the US, so VW could have very well made a motor that was acceptable under Euro 5 or even Euro 6 that would be illegal in the United States.

      • 0 avatar
        Big Al from Oz

        Pch101,
        You are correct. But it also is costing money to reduce emissions in gasoline engines, ie, GDI particulates, which have no emission standard yet.

        The easiest way for the US to assist in the reduction of cost is to use better quality diesel fuel, or, I should say, reset the standards for diesel by improving it’s cetane value and reducing it’s sulphur to what the rest of the modern world is using.

        A higher cetane value will reduce the compression required for the ignition of the diesel fuel. More compression equal more pressure, which in turn equates to more heat. Heat is what creates NOx.

        Using diesel with a higher cetane value will make it cheaper for DEF systems as less NOx is required to be processed. Sort of like a sewrage plant, the more sh!t to more it costs to process.

        The US can reduce the cost of DPF systems by using fuel with 10ppm sulphur content.

        I do know you will state that current US diesel fuel generally meets those standards, but what you do not state is diesel engine design in the US must meet the regulted standards, not what is at the bowser.

      • 0 avatar
        Scoutdude

        It is both a performance and a cost issue.

        They certainly could have passed the added cost along to the consumer IF they did so from the beginning. Pretty much every diesel powered vehicle sold in the US had a significant increase in price for the 2010 models. However at this point no they cannot and will have to bear all the cost.

        The fact that it is a performance issue is pointed out by their actions with the cars that they have already issued a “fix” for. They just upped the dosing of the DEF and extended the timer so that it would run in compliant mode for more than just the time of the standard test length. CA caught this by continuing to operate the vehicle for more than double the normal length.

        There is no way to have software produce bogus readings. Actual emissions testings has nothing to do with what is reported via the software. The software only reports whether the system is operating as intended and doesn’t detect any failed or out of spec components. VW banked on the fact that the testing done at the local level relies on the OBD port and is not an actual emissions test in many localities.

        Actual emissions testing has nothing to do with the OBD port at all. Real testing per the EPA method collects all of the exhaust in big Teflon bags that is then analyzed for its contents. IM 240 as used in CA doesn’t use the bags, but analyzes the exhaust in real time. Now in CA you have to pass the actual test as well as have the computer report that everything is working as designed.

        The basic engine would be no different between one that can meet the euro standards and the US standards it is all in the calibration and ancillary components and the fact is they cheated on the Euro test too.

        • 0 avatar
          Pch101

          “they cheated on the Euro test too.”

          There is no evidence of that. The claim is that the European tests are not realistic, not that VW cheated on European tests.

          VW did not use urea systems on the four-cylinder motors in Europe when it was obliged to comply with Euro 5. It added urea systems to comply with Euro 6.

          Euro 6 standards allow higher NOx levels than does the US. If VW could not comply with Euro 6 without adding a urea system, then it doesn’t make much sense that it could have ever complied with US standards without a urea system.

          I doubt that VW wanted to make a motor with a urea system for the US and without one for Europe, but it also did not wish to add urea systems to European cars before it was required to do so. Hence, the temptation to cheat on the US tests.

          • 0 avatar
            Scoutdude

            NO it has been admitted that they cheated every chance they got. The proof is when they “fixed” the vehicles with SCR when called out by CARB they cheated once again. They just extended the length of time that they operated in a compliant mode and then it reverted to dirty mode just as before.

            Again the SCR has nothing to do with the basic engine it is an after treatment system.

  • avatar
    SoCalMikester

    drop em off at an empty boeing hangar in long beach and ship em off to china

    • 0 avatar

      that is the practical result, but someone has to make the buy back decision and rent the hangar. There are a lot of places in the world they’d be happy to get the cars, no doubt with an “other market” exhaust system DPF/EGR delete. On a global basis, it will all work out worse.

      There isn’t a magic bullet. VW can’t get new chemistry, and the answer to compliance isn’t going to suddenly be discovered when a small army of smart people haven’t figured it out before.

      There are lots of noncompliant cars out there. I demand the EPA seize and crush them like they’ve done to grey market imports….

      /sarcasm

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