The unprecedented vehicle buyback of Volkswagen TDIs has spawned a cottage industry in which some enterprising dealers and individuals have begun to acquire scandal-affected vehicles en masse. Technically, it is not illegal for someone to buy multiple TDI cars and sell them back to Volkswagen. What would raise some red flags for the Federal Trade Commission is if the vehicles were acquired deceptively.
Why are people trying to amass the diesel-powered VWs? Because Volkswagen is paying generously for the vehicles: pre-September 2015 prices plus cash payouts ranging from about $5100 to $10,000, as part of its settlement in the diesel emissions scandal. If you spot someone selling a low-priced TDI affected by the buyback, you’re likely to turn a profit by buying it.
“The FTC takes deceptive practices associated with the settlement very seriously,” an attorney for the agency told Car and Driver, adding that it is monitoring the buyback process.
A New Car for $22 a Month
Consider this: A brand-new 2011 Volkswagen Jetta TDI cost about $18,715 when it was new in 2010. Normally, that Jetta would have depreciated to a trade-in value of about $7000 by now. But you can sell it back to Volkswagen regardless of its wear and tear—it just needs to be in running condition—and get about $17,100 for it.
So, monetarily speaking, scandal-affected TDI owners have not fared so badly. Using those above numbers, if the owner of the 2011 VW Jetta TDI were to sell the car back to the company, that person would have paid about $1600 for six years of use. Or, looking at it another way, it cost about $22 a month for a six-year lease of new car. Not a bad deal. And that’s why so many people are taking Volkswagen up on its buyback; so far, some 275,000 affected owners have signed up, and about 100,000 have been processed and paid.
You Can See How Much Money You’d Get
So who on earth would pass up such an offer and instead sell a TDI on the open market at a lower price? It’s possible some people are knowingly selling their TDI cars for regular-market prices rather than taking the hefty buyout from the German automaker because they simply do not have the time or patience to deal with the buyback process. And some dealers may not care about going through the process, preferring instead just to rid themselves of the inventory at agreeable prices.
But for anyone with a TDI, it’s important to know how much money you’re leaving on the table if you don’t go through Volkswagen’s buyback process. The FTC’s website has a full payment breakdown for affected models. You can see the 2.0-liter breakdown here and the 3.0-liter payment chart here. You can also plug in your VIN for information directly from Volkswagen.
A little research will tell you that, while the trade-in value for a 2010 VW Golf two-door TDI under normal circumstances would be $5700 to $7200, these are not normal circumstances. That VW Golf TDI two-door has a buyback value of about $14,900 from Volkswagen. A 2013 Audi A3 Premium four-door hatchback has a buyback value of $25,877. A 2012 Audi Q7 Prestige S-line with a 3.0-liter engine has a buyback value of $50,255 to $58,657. And so on.
Catch-22
Volkswagen first admitted to installing “defeat devices” on about a half-million cars and crossovers with 2.0-liter and 3.0-liter TDI engines in September 2015, and then announced a $14.7 billion settlement for 2.0-liter cars in June 2016. There was a period between September 18, 2015, and June 28, 2016, when anyone who had sold their 2.0-liter cars before the settlement was announced was entitled to partial restitution. But after then, the buyback has been open to those who legitimately own an affected car. The buyback deadline is September 1, 2018.
If buyers know that the TDI vehicles are affected by this scandal, why is Volkswagen still paying for the cars? It’s thanks to a Catch 22 with federal regulators: The FTC wants to make sure consumers who were originally “harmed” by Volkswagen’s deceptive trade practices—the German automaker had been marketing the TDIs as “clean” and eco-friendly—are duly compensated, while the Environmental Protection Agency just wants the vehicles off the road.
Some 3.0-liter cars may not come off the road, however. Federal regulators are giving Volkswagen the opportunity to fix newer models. Owners would still receive cash compensation.
Dealers Have Been Warned
In a presentation to the National Automobile Dealers Association last fall, the FTC warned dealers not to suggest or imply that they’re part of the “official” settlement. They were cautioned not to misuse the word “buyback” or to make false or misleading statements about the settlement. Volkswagen has company representatives dedicated solely to handling the buyback process at dealerships.
However, dealers can compete for the business that comes hand in hand with tens of thousands of cars being turned back in; marketing other vehicles to those customers was given the green light by the FTC. Although VW dealers cannot sell any used TDIs of any model year, independent dealers and non-VW franchises can, since there is no federal law restricting used cars under recall from being sold.
In a presentation to NADA dealers, the FTC also warned dealers themselves against being scammed, even suggesting that “purchasers may be posing as Volkswagen representatives. Be careful with unsolicited offers to buy eligible vehicles from your inventory.” That’s good advice for private TDI owners, too.
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