After the settlement, what happens next for VW owners?
It’s been widely reported that Volkswagen is paying a $14.7 billion fine to the U.S. government and other entities to settle allegations of cheating emissions tests and deceiving customers for its 2.0-liter TDI engines.
In short, Volkswagen admitted in September 2015 that it had lied to customers and regulators by using special equipment and software to make its diesel engines appear cleaner than they were. Since then, owners have been left holding the bag while waiting for some kind of resolution.
It now appears that resolution is at hand. But what does it mean to the average Volkswagen owner? (Settlement details are yet to be announced for the 3.0-liter diesel engines.)
According to a Volkswagen statement, of about 499,000 2.0-liter TDI vehicles that were produced for sale in the United States, approximately 460,000 Volkswagen and 15,000 Audi vehicles are currently in use and eligible for buybacks and lease terminations or emissions modifications, if approved by regulators.
Volkswagen said customers could choose to sell back their vehicle to Volkswagen or terminate their lease without penalty, or, if a modification is approved, choose to have their vehicle modified free of charge and keep it. Customers who select any of these options will also receive a cash payment from Volkswagen.
According to ABC News, VW will pay owners $5,100 to $10,000, depending on the age of the car and if you owned it on or before Sept. 18. Buybacks will begin this fall if the settlement is approved. Owners will have until Sept. 1, 2018, to make a decision.
More information about the proposed 2.0-liter TDI settlement program, including the settlement agreements in full, can be found at VWCourtSettlement.com or AudiCourtSettlement.com.
There’s good news if you want to get rid of your diesel Volkswagen or Audi. The German automaker is going to give you what it was worth based on the Clean Trade-In Value as published in the September 2015 edition of the NADA Used Car Guide, with adjustments for factory options and mileage.
You could lose a lot of value on your used Volkswagen, according to extensive research done by the car-selling website CarGurus.com. However, VW is going to make up the loss to owners.
The CarGurus’ data team analyzed a sample of the VW models impacted by the emissions scandal to determine what the scandal has cost owners since the “defeat device” news broke in September (right before a really awkward 2016 Jetta launch in New York City). The calculations were based on CarGurus’ Instant Market Value analysis, which the company runs daily on millions of used car listings.
Overall, the median value lost was found to be $1,483, representing an almost 8 percent hit. Some vehicles, like a 2009 Jetta Sportwagen TDI, only drop in value 1.3 percent, while the 2012 Jetta Sportwagen TDI drops 14.94 percent.
So, does this mean you should sell back your used Volkswagen if it has the 2.0-liter, TDI engine? It depends. Do you like the car? Plan to run it into the ground? After all, these are diesels. If the engine is in good shape (and there has been no claims they aren’t mechanically sound), keep the car and take the cash.
However, if you think you will be selling it soon, it would be foolish not to avail yourself of Volkswagen’s offer. After all, you are never going to do as well for trade-in as you are because the clock is turned back to September 2015 for the car’s value. Plus, you’ll still have the additional cash.