You’ve probably read a lot about the Volkswagen “Dieselgate” scandal playing out in the media over the last week. If you are in the market for a diesel or considering selling yours, all that news probably has you both confused and worried about what to do next. You could potentially get a great deal on a diesel—but what if the fix that VW and the government decide to cook up costs you a pretty penny? What’s the right move?
According to Bloomberg, about 58% of millennials were in the market for a diesel car. For the last eight years, the sales of diesel models has grown in the U.S., according to AutoPacific, Inc. a firm in California that does automotive sales forecasting, while hybrid and electric sales have tapered off as gasoline prices have dropped. According to Bloomberg, this was really a result of VW’s successful marketing push that ultimately built a foundation of word-of-mouth because the TDI engine in their cars was really fun to drive, but also supposed to be green. Now, it’s left a lot of owners and potential buyers (as well as auto journalists) incredibly disillusioned and mistrustful about the claims of “clean” diesel.
If you live in California, the effected cars are now considered to be “non-compliant.” This means they don’t meet California’s incredibly strict emissions laws. That will, in turn, drive the resale value of any of the affected models (at this writing they include the VW TDI models from 2009-2015 of the Jetta, Golf, Beetle, and Audi A3s and the 2014-2015 models of the Passat) effectively to zero. That also means that in California, these models cannot be sold from dealers — not until they are fixed and meet the EPA standard.
Most analysts expect that there will be some combination of recall and reprogramming of the affected cars. That does, however, mean that those cars will likely lose their diesel spunk and their fuel economy in order to meet emissions—which is also bad news for those looking for one of these once-coveted cars. There’s also the possibility that VW will offer affected owners some sort of monetary compensation—but much like what happened when Hyundai faced a similar issue where they misstated MPGS—only original owners would be entitled to the money. There’s a great outline of what the possible fixes would include and how they would affect performance and mileage over at Wired.
The only silver lining to this diesel storm cloud is that the cars that are affected could see a steep discount on the used and new car market once the fixes shake out—making them a good buy if the fixes aren’t too egregious. We’ll have to wait and see what the final tally will be, as it could trickle down and affect the entire diesel car industry.
We’re still waiting for the complete fallout of the scandal, and will keep you updated as it progresses, particularly as it pertains to the used car market. Check back here frequently for the latest.
You can also check the EPA for additional details.
Digital media content producer/consultant & former CNN senior producer, now running CN'TRL : Cars, Tech, Real Estate & Luxury.