So what will happen with all of the buyback cars?

VW is going to be sitting on almost half a million used vehicles when this is all over. So seriously, what do you think is going to happen with all of these cars? Here is what I would do if I was running VW.

1. Fix all of the gen 3 cars. Resell clean examples at dealerships perhaps as CPO's and auction off the rest at wholesale auctions.

2. If a fix for the gen 1&2 cars is available, fix the clean examples and do the same as above, except maybe these they would all go to wholesale auctions. Sell off any high mileage or damaged cars for scrap.

3. If no fix is ever approved for the gen 1&2 cars, the scrap yards are going to get tons and tons of metal! That would indeed be sad to see so many useful vehicles that probably far exceed the emissions standards of many countries be scrapped. I would lobby the FTC to modify the agreement to allow the cars to be exported outside the US.

If they do end up getting a fix approved for the gen 1&2 cars they may still opt to ship them overseas due to the potential to flood the market and kill the resale value. Imagine 500,000 used TDI's hitting dealer lots across the country. Auction prices would probably plummet and retail prices would probably be 1/2 to 1/3rd of the buyback price. But then again, recovering about $2-$5 BILLION dollars isn't anything to take lightly either.

Of course this would have another impact to those opting for the fix. The restitution amount may not be enough to offset the potential loss in value, not to mention they may have been able to sell their car back to VW, and then turned around and purchased it back at savings exceeding the fix restitution. For example, say they got $25k for the buyback or $6,500 for the fix. Lets assume that same fixed car would now sell for $12k. If they took the buyback, they'd be able to have the same car and pocket $13k, but by choosing the fix, they lose $6,500. Then again if only the Gen 3's end up with fixes and the rest of the TDIs are shipped out of the country or destroyed, those opting for the fix could see a big increase in their resale value, but probably not beyond what VW offered for the buyback.

So if they do end up fixing and reselling TDI's in the US, and the prices fall considerably, would you buy a used TDI again? I might seriously consider it if I could find a nice low mileage Passat SEL for around $10k.

Your theories sound as good as any I've read. OTOH, who knows where these things are going to end up at this point? We just don't know.

Create an underwater Cross Bronx Expressway on the ocean bottom in a sports fishing area. Game fish thrive in man made underwater reefs.

The settlement is clear that any car must be fixed before it is exported.

standards elsewhere do not match those here.

for each car, bought back, there will be an individual decision made.

if the expected return from a fixed car exceeds the cost to fix (including cost of warranty work), it will be fixed

if the expected return is not as much as it costs to fix, other disposal is likely.

Wow, I didn't catch that no fix equals no export. Here is the language from the FTC Decree.

As specified in Appendices A and B, Settling Defendants may export from
the United States to another country any 2.0 Liter Subject Vehicle, provided that such vehicle
has received the applicable Approved Emissions Modification, and that no vehicle may be
exported if the applicable Approved Emissions Modification has been suspended as set forth in
Appendix B, Paragraph 7.3.

Click to expand...

Option 3 edited accordingly. The only real resolution in that case is get the order modified to allow export or fill the US scrap yards with TDIs. I assume they would have to destroy all the engines and make them inoperable like they did with the cash for clunkers program.

It's specified elsewhere in the consent decree: If the car is not being fixed then the ECU has to be disabled and the non-compliant parts of the emission control system in the exhaust have to be removed and scrapped. What happens to the rest of the car at that point is up to VW. Could be sold for parts or scrap.

It's known that VW has been setting up a system by which dealers could bid on purchasing individual vehicles from VW, having VW pay for the fix to be done (gives their technicians some work), and selling them as used cars. The logistics of doing that are sure to be hellish. How is the dealer supposed to pick out an individual car out of the hundreds of thousands out there and know that it doesn't need thousands of dollars in unrelated repairs to make it sellable?

Some dealers might have been keeping a log of "good" vehicles that they sent back to VW in case they might want to buy THOSE back ... others might not have.

It really surprises me that VW wasn't doing an initial cull before sending vehicles to their storage facilities. If it were me, anything 2009-2010 unless in exceptionally good condition and low mileage, anything with over 100,000 miles, anything with non-trivial body or interior or mechanical damage, anything with non-trivial mechanical modifications or emissions-tampering, anything with a "check engine" lamp on for a non-trivial reason should have gotten the orange spray painted "X" of doom and sent straight to the junk pile instead of storage.

If VW tries to fix and sell ALL of these (or almost all of them), there are some hard lessons about supply and demand to be learned.

I may have said this before, but the average age of a car in the us is something like 11.5 years

that is the average, half the cars are older than that, half younger.

none of the dieselgate cars are over 9 years old.

meerschm said:

I may have said this before, but the average age of a car in the us is something like 11.5 years
that is the average, half the cars are older than that, half younger.
none of the dieselgate cars are over 9 years old.

Click to expand...

Granted

But just guessing

The average miles on these particular cars are more than the average other cars on the street.

......... and speculating many are rode hard and put up wet.

For any Gen 1 or 2 fix to happen, VW's going to have to figure out something soon. Those vehicles sitting in the rain, snow, and sun at facilities around the country are losing value fast.

Chief, I think you captured a lot of the economics at work here: 1) a lot of older/high mileage vehicles will never get repaired because the cost of applying the fix will exceed vehicle value, especially because 2) flooding the market with 1/2 million TDIs would drive the price down drastically. Even repairing 100,000 of these over a 1-year period would glut the market. (I say 1-year period because letting the vehicles sit in a parking lot for longer is an invitation to all sorts of problems with mold/mildew, rubber parts, seals, etc.) I might also speculate that VW would not sell these through their own dealers because cheap, low-mileage TDIs would cannibalize sales of new VWs.

As mentioned in threadzilla, repair will not be cheap, and is likely more involved and expensive than we speculated a year ago given that no fix has been approved yet. The process would look like this:
1) inspect vehicle at current buyback collection lot to determine marketability after repair (e.g., vehicle has all original equipment, no mechanical or electrical issues, cosmetics good).
2) transport vehicle to location for repair. As speculated in threadzilla, probably one of several centralized locations set up by VW with lower-paid mechanics hired and trained to do only the emissions fix.
3) apply fix.
4) test vehicle.
5) wholesale vehicle to 3rd party for domestic sale or possible export.

Item 5 is the key. What is the WHOLESALE value of a repaired TDI, and is it high enough to cover the cost of steps 1-4? Otherwise, VW will just sell existing vehicles accumulating in lots for scrap. I guess it's also possible for VW to sell the fix to a 3rd party and let them do the whole process, that is, assuming there is ever a fix. As time goes by, the likelihood of a Gen 1 fix becomes lower and lower.

If everyone stayed on the originally announced schedule, the Gen 1 fix is supposed to be approved by EPA and CARB and therefore announced, sometime this month. After all this time, give them a couple more weeks, that's all!

CHawk said:

I guess it's also possible for VW to sell the fix to a 3rd party and let them do the whole process, that is, assuming there is ever a fix.

Click to expand...

Even with out a fix, this may be the solution. Perhaps even using multiple parties for the effort.

CHawk said:

I guess it's also possible for VW to sell the fix to a 3rd party and let them do the whole process, that is, assuming there is ever a fix.

Click to expand...

Even without a fix, this may be the solution. Perhaps even using multiple parties for the effort.

meerschm said:

I may have said this before, but the average age of a car in the us is something like 11.5 years

that is the average, half the cars are older than that, half younger.

none of the dieselgate cars are over 9 years old.

Click to expand...

That's the definition of the mean, not the average.

For example, an average age of 11.5 years could be 3 cars 4 years old and 1 car 34 years old so that 3/4 of the cars are younger than the average and 1/4 older than the average.

From inspection of this report showing the age distribution of cars -
https://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsResearch/files/FactsandFigures/M01-03M-Age.pdf
- it's clear there are far fewer cars more than the 11.5 year average than younger.

I will assert that every single bought back car will be fixed, resold, and go on to rack up 1 million miles.

Is that earth around the sun miles?

Trump kills the EPA. Then they can sell them fixed, unfixed or guess which.

MotoWPK said:

That's the definition of the mean, not the average.

For example, an average age of 11.5 years could be 3 cars 4 years old and 1 car 34 years old so that 3/4 of the cars are younger than the average and 1/4 older than the average.

From inspection of this report showing the age distribution of cars -
https://www.lta.gov.sg/content/dam/...esearch/files/FactsandFigures/M01-03M-Age.pdf
- it's clear there are far fewer cars more than the 11.5 year average than younger.

Click to expand...

I stand corrected. (on mean vs median) but a chart reporting the age of cars in singapore is not quite relevant to north america.

I think you will find the North American distribution not quite so skewed.

https://www3.epa.gov/otaq/models/mobile6/r01047.pdf is US data a bit over ten years old.

https://www.rita.dot.gov/bts/sites/...ortation_statistics/html/table_01_26.html_mfd the average age then was around 8 and a half years.



there is a bit of a tail on the old end of things, but my original point that there may be a lot of useful life in the gen 1 cars is still supported by the data.

they are not headed for the crusher as a class.

meerschm said:

there is a bit of a tail on the old end of things, but my original point that there may be a lot of useful life in the gen 1 cars is still supported by the data.

they are not headed for the crusher as a class.

Click to expand...

If it's 6 months from now and there's still no approved fix, then the Gen 1s are heading to the crusher.

CHawk said:

If it's 6 months from now and there's still no approved fix, then the Gen 1s are heading to the crusher.

Click to expand...

IMO

Gen 1 is a lost cause.

No "fix" for them

MotoWPK said:

From inspection of this report showing the age distribution of cars -
https://www.lta.gov.sg/content/dam/...esearch/files/FactsandFigures/M01-03M-Age.pdf
- it's clear there are far fewer cars more than the 11.5 year average than younger.

Click to expand...

Interesting stat:

0-2 years = 'bout 21%

8-10 years = 'bout 31%

I am confounded about the very few car in the 3-7 year range

Wondering IF the used cars in dealer's lot is where they are

2015vwgolfdiesel said:

Interesting stat:

0-2 years = 'bout 21%

8-10 years = 'bout 31%

I am confounded about the very few car in the 3-7 year range

Wondering IF the used cars in dealer's lot is where they are

Click to expand...

in Singapore

Yeah, relying on auto age stats from Singapore seems like a mistake. Personally, I think there are a lot of gen 1 cars in great shape with plenty of value left. We'll see.

http://forums.tdiclub.com/showthread.php?t=473780

There is a thread that talks about the gen 1 fix. My assumption, to go ontop of all these other assumptions, is that anything over 100k miles will not be fixed and resold. The means that I could make the wife happy and buyback her turned in Golf.

The shear logistics of dealing with all of these cars just boggles my mind.

I've seen some of the pictures from different storage sites but just how many do you think there are? What's an average lot, 2,000, 5,000, 10,000 cars?

Think about what happens when they finally decide what to do with them. Every one of them will have a dead battery just from parasitic battery drain. Do you pop a new battery in every vehicle just to move it? Do you jump it every time you need to move it?

And what about cars they do intend to resell, what do you do about the locked-out radios once they lose power? Radio codes are not something I've ever seen mentioned.

I know diesel fuel stores better than gas, but I could see this taking years to dispose of all the cars.

Now may be a good time to buy stock in batteries and Pioneer Electronics!

and remember, once certified they can pull those components ,slap them on the next car and cert that..I didnt see anything that said VW cant reclaim the parts 10 seconds after someone penns off that the car just had the fix done.Unethical, but they dont play that game......

That's not going to happen.

GoFaster said:

That's not going to happen.

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I agree...

Where were those pictures taken? Those cars look pretty new.

I'd have to presume VW knows some of the wrecks they've taken back are lost causes. No sense in holding those.

chief poncho said:

Where were those pictures taken? Those cars look pretty new.

Click to expand...

I think that's the first photographic evidence of VW throwing in the towel on any of these ...

In that pile, of what I can tell, the Jettas are all Mk5 (2009-2010).