Volkswagen Buying Back Bad Diesels From Dealers At Pre-crisis Prices

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.

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

@Kyree 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.

@Kyree 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.

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.

@dash riprock 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.

@dr_outback 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

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.

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.

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.

@Pch101 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.

@George B 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.

@Scoutdude "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.