By on October 1, 2016

Volkswagen logo badge (Francis Storr/Flickr)

Volkswagen AG is making nice with its once-ornery U.S. dealer network to the tune of $1.85 million per dealer.

The automaker announced details of its $1.21 billion dealer settlement late yesterday, Reuters reports, with cash payouts to its 652 dealers spread out over the next 18 months. Meanwhile, once-loyal Volkswagen owners have hopped on the buyout bandwagon in big numbers.

Of the 475,000 emissions-cheating 2.0-liter TDI models sold in the U.S., 311,000 owners have so far opted to take part in the customer settlement. For now, the only option is a buyback and cash payout, as regulators haven’t approved a fix for the polluting vehicles. Under the settlement, 85 percent of the afflicted vehicles must be off the road by June 2019.

Whether they’ve soured on the brand or aren’t confident Volkswagen can ever offer a fix, many are turning to the cash option. One longtime Volkswagen owner told TTAC that he’ll hand over his vehicle on November 2, claiming he doesn’t believe the company can find a fix —especially one that can be incorporated into his wagon.

About 3,300 owners have opted out of the settlement, preserving their right to fight the automaker in a class-action lawsuit.

A federal judge could sign off on the settlement on Oct. 18, after the U.S. Justice Department, Federal Trade Commission and lawyers representing U.S. owners gave their approval yesterday.

Under the dealer agreement, some of the automaker’s incentive payments will continue, and the company will buy back any remaining unsold diesel vehicles. Capital improvements to dealerships requested by the automaker are suspended. Also included in the agreement is the stipulation that Volkswagen can not sell any diesel vehicles in 2016 or 2017. (The automaker isn’t sure if it even wants to market a U.S. diesel again.)

While the agreement moves Volkswagen closer to its goal of putting the diesel nightmare behind it, its 3.0-liter diesel models remain in limbo. About 85,000 Volkswagen, Audi and Porsche 3.0-liter TDI models await a settlement in the U.S., with the automaker hoping for a technical fix. If it doesn’t find one by the end of October, its only option is another expensive buyback program.

[Image: Francis Storr/Flickr]

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60 Comments on “Volkswagen Dealers to Collect $1.85 Million Each as Owners Flock to Buyout Offer...”


  • avatar
    Felix Hoenikker

    Does this mean that VW will by back a TDI in any condition for the same price? I can imagine that beat up and damaged Jetta TDIs could be picked up cheaply then re-sold back to VW for the difference. Anyone heard anything along these lines?

    • 0 avatar
      dr_outback

      Payments will be split between the former owner and new owner if the vehicle changed ownership after 9/18/16.

    • 0 avatar
      th009

      If you bought one after 2016-06-28 you get nothing at all.

    • 0 avatar

      Yeah, the company is not going to let a massive loophole like that just happen when they’re already losing their shirt.

    • 0 avatar
      5280thinair

      The only variable regarding how much VW will pay per car appears to be mileage. How much they pay each current or former owner varies depending on various factors (like when purchased, and if purchased after the settlement was announced I don’t think you’re eligible for any compensation. Finally, the car has to make it to a dealer under its own power to be eligible for the buyback, and VW wants to see proof of current registration.

      So, no going and buying up wrecked heaps at this point to attempt to cash in.

  • avatar
    Chocolatedeath

    SO why is it that I still would love to have an Audi 6 cylinder diesel.

  • avatar
    manny_c44

    I like VW, but I will obviously give back my TDI jetta for 100% of what I bought it for. No one is going to pass up on a free car offer. And then with the money I will buy another VAG car.

    Probably an S3 or an A3.

    • 0 avatar
      JRobUSC

      or, one from an automaker that did things the right way and didn’t lie and cheat for years, blatantly spitting in everyone’s faces as they shoved “Truth in Engineering” ads down our throats while magazines fawned over cars festooned with giant AUDI CLEAN DIESEL decals, as VAG and Audi executives laughed about pulling the wool over the eyes of us idiot consumers all the way to the bank.

      Audi, and VAG, will never get a penny of my money.

      • 0 avatar
        manny_c44

        I’m not sure, independent tests done in Europe show that their cars are still the cleanest operating diesels. So every manufacturer is cheating emissions tests (where people actually drive them).

        I never for a second really was angry with VW over this. It is surely dishonest, but the government response was disproportionately harsh. And I get a free car, and I can’t really think of any car I’d rather have than an Audi, everyone elses designs are just too gross.

        • 0 avatar
          thattruthguy

          If you aren’t really angry with VW, I assume that you haven’t been trying to compete with them in the marketplace.

          • 0 avatar
            manny_c44

            Like I said, where people actually buy Diesels (Europe) none of the Diesels are meeting the emissions requirements. Here in the US the Diesel passenger car market is and always has been a VW curio.

        • 0 avatar
          JohnTaurus_3.0_AX4N

          Yeah, I love it when people lie to me, too. To rip me off and take advantage of me. Feels awesome. Especially that “punched in the gut” feeling when you learn of it. Nothing satisfies me more than knowing someone cheated me.

          40x the legal limit allowed is not “cleaner” than other diesels, unless you count only certain compounds. So not only do you like it when someone lies to you, you have no moral objection to skewing data and pretty much lieing to protect the admitted liars.

          Sure, they’re the cleanest of them all, they never cheated, everything is great.

          And no, “everyone” is most certainly NOT cheating as VW has. Some have been accused, but no one has proven without a doubt that someone else uses a defeat device. How many other widespread recalls, criminal proceedings and civil law suits have been filed in those cases? Anybody else buying back unfixable cars?

          Like the “everyone’s doing it” line is a valid excuse for anyone older than 14.

          But, yeah, its fine that they lied and produced large amounts of a toxin that causes death while GM sold compliant diesel products, including cars. As did others.

          It took GM forever to pass emissions in the US with the diesel Colorado/Canyon, BUT THEY DID IT WITHOUT LYING AND CHEATING! Cue the “GM murdered fiftyleven million people by building a defective ignition switch” because a design flaw/premature wear (or whatever it was) that shows up after years of use is exactly the same as purposely writing a program to do nothing short of lie, cheat and decieve.

          Mahindra wanted to sell its diesel pickup here and it all went to hell because they could not pass emissions. They did the right thing in not trying to cheat to pass, even if it caused them to renig on dealership/distribution contracts (IIRC).

          You’re either a delusional fanboi and need to seek professional help, or you’re trolling for reactions, or you’re both.

          • 0 avatar
            VoGo

            Manny thinks the agreement which the government and VW agreed was too harsh in requiring buyback of all those dirty diesels. But he is happy to take their money.

          • 0 avatar
            RobertRyan

            @JohnTaurus_3.0_AX4N
            Opel is under investigation by the EU, for possibly using a ” cheat” device

          • 0 avatar
            HotPotato

            I think what he’s referring to is that current-year diesels got real-world emissions tested in Europe very recently, and VW’s were by far the cleanest of them all, emitting only 2x as much NOx as in emissions testing, vs. 13-15 times as much for competitors, including Nissan/Renault, Fiat, and pretty much every other non-VW Group brand. VW is, in other words, ironically now the only brand that does NOT cheat on the diesel emissions test. The other makes were just canny enough to say the systems shut off “under certain conditions, to protect exhaust or engine components.” In the case of the Fiat, for instance, “certain conditions” appear to be “most of the time.”

      • 0 avatar
        hreardon

        JRobUSC –

        I get the anger at how VAG cheated, but find me an automaker who *hasn’t* taken part in concerted efforts to obfuscate or outright lie about some kind of costly emission/safety/nuisance issue. Ford hid exploding tires, Toyota tried to cover up the acceleration issue, Jeep hid exploding gas tanks, GM ignition lockouts, Honda exploding airbags, Mazda rust, Hyundai and Ford fudged EPA mileage estimates, the Ford Pinto, etc., etc., etc.

        Additionally, now that the Euros are getting more strict they’re realizing that most of the other diesel manufacturers have taken part in some sort of white lie about emissions for decades.

        I’m not giving VW a pass in any of this, but I am saying that if you think that other manufacturers haven’t done their fair share of covering up omissions, lies and mistakes – you’re going to be sorely disappointed.

        • 0 avatar
          SoCalMikester

          the toyota “issue” was a floor mat issue caused by a dealer.

          the jeep “issue” was gas tanks that met the standard of the time, then 15 years later they no longer met that standard. FCA was nice enough to offer trailer hitches to protect the other elderly tanks.

        • 0 avatar
          Dave M.

          Toyota? Really? Honda’s with Takata bags?

          I don’t think you see the difference – much like GM did with the ignition switches (continuing to install despite huge red flags), VW knew (if fact, from the get-go) that their engine didn’t meet standard. And designed it that way.

          I love Audi’s too. But I’d be pissed that I was mislead as a design feature.

      • 0 avatar

        I love the word “festoon”.

      • 0 avatar
        Passat2014

        “An automaker who did things right” yea, thats a good one! :)

        http://www.notey.com/@greencarreports_unofficial/external/11902306/study-suggests-every-european-diesel-maker-cheated-on-eu-tests.html

  • avatar
    Syke

    Like, we should be surprised? Like manny_c44 says, who’s going to pass up a chance to get a new toy for free?

    And very few people are SO attached to their cars that they wouldn’t mind having a new(er) one.

  • avatar
    28-Cars-Later

    So VAG is paying dealers for lost business as the result of its actions?

    Taken as a concept, boy does this open a can of worms.

    Cadillac dealers should sue New GM for the destruction of their brand and lost business. The folded brands are probably screwed but because Cadillac has carried on, maybe we’ve got something.

    • 0 avatar
      thattruthguy

      Being in business with dummies is on the GM dealers. Volkswagen literally was a fraud. It isn’t a groundbreaking precedent to make good on actual fraud.

      • 0 avatar
        28-Cars-Later

        Oems have committed fraud before, settlement because of it is a new precedent AFAIK.

        • 0 avatar
          thattruthguy

          OEMs have treated treated dealers aggressively and poorly, but when have they ever misrepresented their product line like this? As a rule, failure to deliver planned future products isn’t inherently actionable if the manufacturer is making a good faith effort to develop them. Volkswagen employees at a high level knew that VW’s sales history and announced plans were phony and couldn’t be delivered legally.

  • avatar
    MatadorX

    I don’t understand why people are so willing to funnel their free money back into another VW product. It’s not like the Tacoma frame recall where you got extra cash on the hood of a new truck to keep your payout at the Toyota store.

    VW is a massively corrupt organization, trust me I used to work for a company handling their boarder logistics in Texas.

    If you guys only knew the condition the models they import to the USA from Puebla arrive in….that is the REAL VW cover up. Let’s just say 5% arrive so badly vandalized they have to be crushed, the remainder (15-20% of ALL inbound units) are poorly repaired and foisted on unknowing consumers.

    • 0 avatar
      28-Cars-Later

      “I don’t understand why people are so willing to funnel their free money back into another VW product.”

      I have never understood this, its akin to giving Dr. Nick Riviera repeat business.

      Call 1-800-DOCTORB! The “B” is for bargain!

    • 0 avatar
      Kenmore

      I’d buy a Caddy if they brought them here. But I don’t drive a whole lot.

    • 0 avatar
      JRobUSC

      I don’t get it either. The majority of VW and Audi diesel owners were the German equivalent of Prius owners — totally smug and full of themselves, unable to refrain from telling everyone how “in the know” they were for their ownership choice. Now that everything about the cars was a total sham, I’d feel betrayed. Embarrassed. There’s no way I’d reward them with more of my money.

      • 0 avatar
        Kyree S. Williams

        Well, speaking as a two-time TDI owner, I bought the cars because I liked them…not because I thought they were superior to what everyone else was driving. So, since I didn’t pop my mouth off about how much better my car was than everyone else’s, I have nothing to feel embarrassed or betrayed about.

        • 0 avatar
          Tosh

          As a TDI owner, you don’t even feel betrayed?! And just because YOU don’t feel betrayed, that does NOT mean that VW didn’t betray you (and the rest of us).

      • 0 avatar
        RobertRyan

        @JRobUSC
        Must be a US thing.

    • 0 avatar
      brettc

      I don’t understand it either. I was thinking that maybe if a dealer made a good enough deal on a Golf, I’d consider it.

      But now I’ve decided that I’m going to get another brand. I want a hatch for my next car. For potential choices: Hyundai has the new i30 coming out which we’ll get as the Elantra GT, Kia has the Niro coming out, Ford already has the C-Max and Focus, Chevy has the Cruze hatch coming, Honda has the Civic hatch coming, and even Buick might be offering a wagon. So I’ve got plenty of choices that are not VW, and I’ve got until 2018 to decide which one I like best.

      So VW can suck it, from my perspective. Their communication has been horrible about it for the past year, and I’m done with them. I’m glad that this has happened in a way because I can keep my car for 6 years and still get just over $22000 for it at turn in time, assuming I keep the mileage below about 77000.

    • 0 avatar
      yankinwaoz

      This sounds like it would be a great post for this board.
      (1) Who is vandalizing the cars? Why?
      (2) Is it only VW? Or does Ford and other car makers suffer from the same?
      (3) It the corruption you speak of the fact that VW fixes the cars where they can?

  • avatar
    th009

    “… Volkswagen can not sell any diesel vehicles in 2016 or 2017.”

    Actually that’s 2016 and 2017 model years, so it’s not really much of a restriction.

  • avatar
    APaGttH

    …Of the 475,000 emissions-cheating 2.0-liter TDI models sold in the U.S., 311,000 owners have so far opted to take part in the customer settlement…

    Wow. Devastating.

  • avatar
    gasser

    Does the vehicle condition (dings and scratches) affect the buy back price?? Or is it strictly the year and mileage that determines the buy back?

    • 0 avatar
      Jimal

      Strictly year, mileage and options in the calculation. I just submitted the required identification documents for my wife’s Passat. I’d love to turn the car in and be done with it, but it is her car and she likes it. We don’t have to make a decision yet, so I’m still trying to get her to change her mind.

    • 0 avatar
      thattruthguy

      Aside from simply paying less for the cars, differences in condition don’t make any difference to VW because these cars won’t be resold.

  • avatar
    SCE to AUX

    So the pile of cars VW would be fixing has dropped from 560k down to 249k, and it continues to dwindle.

    At some point – perhaps long past – it’s not worth trying to repair that many cars, which will remain on the road for many years, requiring service, etc, forever. And, the first repaired car will be critiqued by the car journalists for its low performance, poor fuel economy, etc.

    I’ve said it here before, but I believe VW isn’t going to fix *any* cars; all of them will be crushed. They’re just trying to work out the money/legal part now.

    If VW really wants to remake itself as an EV producer, then fixing diesel cars only becomes a lingering tie to the dirty past.

    • 0 avatar
      RobertRyan

      @SCE to AUX
      They are trying to forget ” Dieselgate” Well in Europe and elsewhere they have and are in the process of bringing out new diesel models

    • 0 avatar
      hreardon

      Agreed, SCE to AUX. The number of people who’ve already filed paperwork for the buy back is pretty impressive. I think what everyone, from Volkswagen to market analysts to us armchair quarterbacks here at TTAC, are interested to see is what percentage of those who turn in the cars pickup another VAG product.

      I suspect that the percentage of people who are truly outraged and furious with VW is somewhat less than the percentage who are happy to take some free money and get a new car, regardless the brand.

      Were I VW, I wouldn’t want to bother putting into place the tools, training and materials to effect an actual repair. I’d make sure I hit that threshold number by the required date for having cars off the road and then put this whole thing behind me.

      Diesel is indeed dead, especially if Bertel’s recent Forbes article about hybrids reaching cost-price parity with diesel are accurate.

  • avatar

    I’m intending to use the $3k VW is sending me as a down payment on a used Leaf…it would fit in nicely with my fleet and usage patterns.

    VW lost me not because of the botched TDi thing, but the way they treated me when it puked the DPF 3,000 out of warranty, while there was a TSB…clearly defective.

    That goes for Audi products too. In contrast, BMW stood behind their car.

    n=1, but in the end, VW will have electrified me.

  • avatar

    311,000 cars which, aside from scandalously misrepresented emissions figures, are perfectly OK, being prematurely crushed.

    The environment sighs a huge breath of relief.

    • 0 avatar
      Lorenzo

      Many luxury cars with many remaining miles of utility are junked because the cost of repair exceeds the resale value. Same thing. All those pick and pull places could benefit, along with their customers, assuming VW would/could just remove the engine and/or rigged control system and send the rest to junkyards.

      Chances are, it’ll be cheaper to crush them all, as-is, instead of removing the diesel engine and sending them to salvage yards. Too bad. Some are likely in good enough shape to make a gas engine swap possible, even with a salvage title.

      • 0 avatar
        gasser

        Diesel to gas conversion, needing new tank, fuel pump, ECM, wiring harness, emissions control units, possible new fabrication for engine mounts and mounts for power steering… I don’t think it would be worth the cost, except perhaps in the latest of models. Then the issue of resale arises and who would fix it down the road. The biggest cost of vehicle ownership is depreciation and I don’t see a decent resale on an aftermarket gas engine swap.
        I lived through the Mercedes grey market of the 80s where in people imported their own MBZ from Germany and had aftermarket shops whip up an emissions control system. Some were good, some were bad, almost all were worthless 5-6 years down the road when they failed California smog testing for annual registration.

        • 0 avatar
          Scoutdude

          A gas engine conversion should be doable as a bolt in affair with all factory parts. That was done with many of those vehicles that had the Olds 350 diesel. So in theory VW may propose that as the fix for all of that never sold inventory.

      • 0 avatar
        HotPotato

        Or they could give them for free to an EV conversion company, restoring their green credentials! I saw a very nice Jetta converted to a 9″ electric motor, I believe by the same company that made the triple-motor electric Ferrari.

        • 0 avatar
          Scoutdude

          That would be very hard for the EPA to not approve, if there was a procedure to verify the entire diesel powertrain was destroyed and verification that it was converted before it could be licensed again.

  • avatar
    jim brewer

    I can see the impulse to get another.

    VW has some unique attributes. People may not realize that the excellent performance is a direct result of the cheating.

    Still, it’s a bad idea. I credit Matador’s post that the company is corrupt or surprisingly incompetent from top to bottom, in ways that have nothing to do with diesels. We have the Boxster IMS scandal as evidence that this is systemic issue.

    Such matters are not easily remedied by a determination to straighten up and fly right.

  • avatar

    I’m sure the “crush” will be comprehensive. Car and Driver did a bit on Mazdas a few years back, where lightly damaged cars after a shipping accident were taken apart. IIRC, the tires were holed, the airbags all deployed, and the rest crushed….just so none of the parts found their way into commerce.

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