This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to colleagues, clients or customers, use the Reprints tool at the top of any article or order a reprint of this article now.
Volkswagen diesels sit behind a security fence on a storage lot near a VW dealership in Salt Lake City, Sept. 23, 2015. (Credit: AP)
Car dealers predictably steered clear of Volkswagen's dirty diesels after the company admitted to equipping its cars to cheat emissions tests. At auction, values for the 500,000 or so affected cars in the United States fell between 8 percent and 14.5 percent after the Volkswagen announcement in mid-September, according to new data from Kelley Blue Book. Values for gas-powered versions of the same cars dipped by 1.8 percent, evidence that the scandal could weigh on Volkswagen's reputation at large.
The price drop isn't surprising. The risk of being stuck with a bunch of toxic assets isn't worth the reward to the average car dealer. Drivers, however, see things differently. Volkswagen's diesels don't appear to have been dented nearly as much on secondary markets, where owners sell used cars directly.
At CarGurus, an online car shopping platform, the average price of the affected cars has only dipped by .06 percent since the scandal broke. Carlypso, a California based car-shopping startup, reported a price drop of .3 percent. That's right-all the hue and cry about a sinister plot to cheat emissions tests sent prices plunging by about $30. "So far, it looks pretty much like a wash," said Carlypso co-founder Chris Coleman.
This isn't to say people don't expect values on these cars to change drastically. It's just that the predictions are polarized and, at the moment, they appear to be canceling each other out. Even the opinions of Carlypso's staff are drastically split. "I had one colleague here telling me prices were going to hit rock-bottom," Coleman explained. "I'm in the other camp."
Propping prices up are the people who expect Volkswagen to somehow make good after the scandal. The company is exploring a range of options, from a software fix to completely replacing the cars. Considering the flurry of lawsuits, financial settlements also seem likely.
Many TDI owners are taking a wait-and-see approach. Heidi Johnson, a fashion-apparel buyer in Charleston, S.C., doesn't feel like she has a lot of options for the 2014 Volkswagen Beetle she bought a few months ago for $19,000. "I owe money on it," she said, "and at this point who's going to want to buy it?"
What's more, Johnson really loves the champagne-colored bug: "It's such a great car. The only problem is I'm embarrassed to drive it now."
Her experience speaks to another bullish force in the market: diesel fans. The largest source of diesel engines in the U.S. just vanished, leaving the 500,000 pilloried models as pretty much the only supply. Demand among diesel diehards is likely propping up prices.
The early days of the scandal provide a sense of just how strong diesel-fever can be. The market for newVolkswagen diesels ground to a stop quickly, as the company froze sales of 2015 models. But a few new vehicles still trickled off of lots in the fourth week of September, according to TrueCar, a company that matches online shoppers with nearby dealers.
The average transaction price for those cars was $30,671, an astonishing 13 percent higher than it had been two weeks before the diesel scandal broke. Think about that: As headlines grew even more alarming and Volkswagenexecutives were prepping for a new chief executive, U.S. drivers paying far more for diesel Volkswagens than they had been at any point in the year to date.
What about the pollution? If the Hummer boom of the late-90s is any indicator, plenty of drivers simply won't care. Pollution is what economists call an externality, a cost born by all of us-as opposed to an internality, such as buying a dated Chevrolet Cobalt with a questionable ignition switch that only affects the individual.
Where Volkswagen values go from here is far from certain. Much depends on how the company repairs both its cars and its reputation. The only thing we know for sure is that drivers remain exceedingly curious about the situation. Since Volkswagen admitting to gaming emissions tests, Kelley Blue Book has seen a 7 percent increase in web traffic from people shopping for Volkswagen diesels. There has also been a 79 percent jump in the volume of owners searching for the trade-in value on the same models.
"There's definitely a bit of an asterisk on these cars right now," said Rick Wainschel, vice president of customer analytics at KBB. "People are searching for any information that they can get."
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
The company should fix them. Recall them and fix it.
But if it isn't a matter of passing a test in your state, then don't worry about it.
I know I couldn't just get anot her car because of something like this.
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
Well sure they are good cars, but they won't pass the emissions test in some states. Buyers will have to fork over a lot of money to fix them.
I'm not convinced that they CAN be fixed.
Sure, the computers can be reprogrammed to get rid of the test bypass cheat, but then the cars will either run badly (poor acceleration, lousy mileage, reduced maximum speed) or continue to put out 40 times the legal limit of soot and smog making exhaust gases.
Lily, they may LOOK LIKE good cars, but they're not.
VW will probably have to refund the purchase price to all the original owners, and maybe to people who bought them used prior to the issue becoming public knowledge as "holders in due course", but fools who buy them used NOW, maybe not. They bought them KNOWING that the problem exists.
So for those foolish people, they might well wind up with a nice car that has almost no acceleration and/ or lousy fuel mileage. That's on them.
IMHO it's dumb (or risky) buying something expensive KNOWING it's defective and might not be fixable.
-- Edited by ed11563 on Sunday 25th of October 2015 11:36:34 AM
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
Because to drive it legally, it has to have a current sticker saying it passed all the safety and emissions tests. Around here, failing to have the current sticker is a $65 fine every time you get caught.
Husker, do you like breathing in soot?
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
Because to drive it legally, it has to have a current sticker saying it passed all the safety and emissions tests. Around here, failing to have the current sticker is a $65 fine every time you get caught.
Husker, do you like breathing in soot?
That is a BS issue.
What is going to give off more emissions? A car that gets 25 mpg but supposedly burns "clean", or a car that gets 45 mpg?
You are still using less fossil fuels.
__________________
I'm not arguing, I'm just explaining why I'm right.
Well, I could agree with you--but then we'd both be wrong.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
Because to drive it legally, it has to have a current sticker saying it passed all the safety and emissions tests. Around here, failing to have the current sticker is a $65 fine every time you get caught.
Husker, do you like breathing in soot?
That is a BS issue.
What is going to give off more emissions? A car that gets 25 mpg but supposedly burns "clean", or a car that gets 45 mpg?
You are still using less fossil fuels.
How about a diesel car that gets 45 mpg, meets the emissions standards, and goes from zero to 60 in
90 seconds?
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
Because to drive it legally, it has to have a current sticker saying it passed all the safety and emissions tests. Around here, failing to have the current sticker is a $65 fine every time you get caught.
Husker, do you like breathing in soot?
That is a BS issue.
What is going to give off more emissions? A car that gets 25 mpg but supposedly burns "clean", or a car that gets 45 mpg?
You are still using less fossil fuels.
How about a diesel car that gets 45 mpg, meets the emissions standards, and goes from zero to 60 in
90 seconds?
That would be great if they have it. I'm just saying that a few cars on the road that are a little out of what they were advertised isn't going to make any difference--especially since they get great mileage.
__________________
I'm not arguing, I'm just explaining why I'm right.
Well, I could agree with you--but then we'd both be wrong.
If you had a car, and loved it, but then find out it doesn't pass a test, why should you not still love it?
Because to drive it legally, it has to have a current sticker saying it passed all the safety and emissions tests. Around here, failing to have the current sticker is a $65 fine every time you get caught.
Husker, do you like breathing in soot?
That is a BS issue.
What is going to give off more emissions? A car that gets 25 mpg but supposedly burns "clean", or a car that gets 45 mpg?
You are still using less fossil fuels.
How about a diesel car that gets 45 mpg, meets the emissions standards, and goes from zero to 60 in
90 seconds?
Well. Ed. These VW cars never did that anyway.
Matter of fact, very few cars will.
And you drive a prius. So it isn't like you're starring in your own little NASCAR race every time you go out.
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
My point is, most people can't just get another car because of something like this.
And, these vehicles will pass emissions testing because the computer on the car recognizes when they are being tested.
And, how many states still have the inspections?
And, it isnt like a person will be pulled over just because of a sticker. So don't speed or drive stupid.
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
But even if it did, the computer is programmed to detect testing and comply.
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.
And, it isnt like a person will be pulled over just because of a sticker. So don't speed or drive stupid.
In NY the highway patrol sets up checkpoints, typically on a ramp connecting two freeways, so the cars are going slowly single file. Officers stand where they can see the stickers at a glance, and they DO pull cars over for out-dated or missing inspection or registration stickers.
Then they do a sobriety check.
Then they sometimes impound the car.
Also streets that have parking meters, have meter maids. They check the stickers and write tickets for out of date stickers.
VW diesel owners beware.
__________________
The Principle of Least Interest: He who cares least about a relationship, controls it.
I personally don't know why someone with a VW would want a diesel.
I can see it in a bigger vehicle, a work vehicle.
But a bug?
I just don't get it.
__________________
A flock of flirting flamingos is pure, passionate, pink pandemonium-a frenetic flamingle-mangle-a discordant discotheque of delirious dancing, flamboyant feathers, and flamingo lingo.