Side effect of settlement: Used TDIs worth a lot more?

It occurs to me that one beneficial side effect of the proposed settlement is that there is now a reason for TDI values to jump.

At this point, there's still a bit of risk because it's not certain that the settlement will be approved. But it's now likely. At the end of July, it will be more certain, and once final approval occurs in September, certain.

Here's the rationale. There are three time periods for owners.
1) You owned the car at the beginning of the fiasco (Sept., 2015)
2) You bought in after the problem was uncovered, but before June 28, 2016
3) You bought after June 28, 2016.

Only the people in middle are treated differently. They have to share their settlement with the previous owner. But in the case of the old owners and the new owners, they get the full settlement.

So, I can buy a TDI today and get the settlement at some point during the next 2 years. As long as the settlement is approved and the car doesn't get totaled and continues to run.....I'll be able to exit at a known price.

Think how this works for someone who needs a car and likes the idea of a TDI. He can treat this essentially as a low (or no) cost lease. It even has mileage caps similar to a low mileage lease deal.

If I pay full settlement value for a TDI today, I can essentially drive for 2 years at no cost and then transfer it to VW. Darned good deal.

If I park it for 2 years, I'll end up with low mileage... getting extra $$ for transferring it. In two years, the mileage adjustment will increase by ~25,000 miles, meaning the settlement amount will increase by ~$1500 (I'm using a 2012 as my example, but the behavior is not unique to any one type of VW). That's 7-10% ROI. Not a huge win, but way better than a 2yr. CD or a Treasury bill/bond.

The above transactions are at settlement value. But someone needing a car for a couple of years might be willing to pay above that amount. Someone wanting to escape TDI purgatory might want to accept less. But the price for used TDIs should tend towards the settlement amounts, particularly after the deal is approved.

The values have not updated yet...The first result from a "TDI for sale" google search finds a 2015 Jetta 4D SEL TDI in Seattle for $20,991. The buyback w/o considering mileage is $28K (and the mileage is very low...so it will actually be higher). You can buy this car, drive it for two years, and make $7K! There are many other candidates. Or just park it for 3 months and make 7K. So I predict prices will now start to rise.

uncle fishhead said:

It occurs to me that one beneficial side effect of the proposed settlement is that there is now a reason for TDI values to jump.
At this point, there's still a bit of risk because it's not certain that the settlement will be approved. But it's now likely. At the end of July, it will be more certain, and once final approval occurs in September, certain.
Here's the rationale. There are three time periods for owners.
1) You owned the car at the beginning of the fiasco (Sept., 2015)
2) You bought in after the problem was uncovered, but before June 28, 2016
3) You bought after June 28, 2016.
Only the people in middle are treated differently. They have to share their settlement with the previous owner. But in the case of the old owners and the new owners, they get the full settlement.
So, I can buy a TDI today and get the settlement at some point during the next 2 years. As long as the settlement is approved and the car doesn't get totaled and continues to run.....I'll be able to exit at a known price.

Think how this works for someone who needs a car and likes the idea of a TDI. He can treat this essentially as a low (or no) cost lease. It even has mileage caps similar to a low mileage lease deal.
If I pay full settlement value for a TDI today, I can essentially drive for 2 years at no cost and then transfer it to VW. Darned good deal.
If I park it for 2 years, I'll end up with low mileage... getting extra $$ for transferring it. In two years, the mileage adjustment will increase by ~25,000 miles, meaning the settlement amount will increase by ~$1500 (I'm using a 2012 as my example, but the behavior is not unique to any one type of VW). That's 7-10% ROI. Not a huge win, but way better than a 2yr. CD or a Treasury bill/bond.
The above transactions are at settlement value. But someone needing a car for a couple of years might be willing to pay above that amount. Someone wanting to escape TDI purgatory might want to accept less. But the price for used TDIs should tend towards the settlement amounts, particularly after the deal is approved.
The values have not updated yet...The first result from a "TDI for sale" google search finds a 2015 Jetta 4D SEL TDI in Seattle for $20,991. The buyback w/o considering mileage is $28K (and the mileage is very low...so it will actually be higher). You can buy this car, drive it for two years, and make $7K! There are many other candidates. Or just park it for 3 months and make 7K. So I predict prices will now start to rise.

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I think you are 100% go to go on all counts

Are you sure the buybacks and restitution are allowed for those who buy today? The FAQ on VWs website doesn't mention this but alludes to owning it in September

I thought you had to own the vehicle as of yesterday, but I am not 100% sure. Their was a lot of information in all the documents yesterday to remember and process.

You are an eligible owner if you purchase a TDI after June 28, 2016. You're also a full owner if you had it before September 2015 and sort of a "half owner" if you bought it in the last 9 months.

I think the logic is that people who owned early are obviously impacted. People who sold after the problem became visible probably lost some...but so did the people who bought it from them (so they split the restitution). FYI, this was the big reason for the gag order.....to have a clear line in the sand on a specific date so that everyone would know at once.

People who buy and sell now know what the deal is going to be. Sellers relinquish the car, the title, and all reimbursement rights to the new buyers.

So if I bought the car 3 months ago I need to sell it to my wife for a $1 to get the full benefit?

Interesting question. But I seriously doubt it. Whoever sold you the car is an "eligible seller" entitled to half the modification amount. You get the other half. Anyone who buys it now should only be able to buy the 1/2 that you're entitled to.

Let's look at the document:

"The following entities and individuals are excluded from the Class:
a) Owners who acquired ownership of their Volkswagen or Audi 2.0-liter TDI vehicles after September 18, 2015, and transfer title before participating in the Settlement Program through a Buyback or an Approved Emissions Modification;"

d) Owners who sell or otherwise transfer ownership of their Volkswagen or Audi 2.0-liter TDI vehicle between June 28, 2016, and September 16, 2016 (the “Opt-Out Deadline”), inclusive of those dates;

So you would lose your 1/2 by selling it.

"2.30. “Eligible Owner” means the registered owner or owners of an Eligible Vehicle on June 28, 2016, or the registered owner or owners who acquire an Eligible Vehicle after June 28, 2016, but before the end of the Claim Period....."

If the original seller doesn't submit their claim by Sept 16...they are SOL:
"If the Court enters the Preliminary Approval Order on July 26, 2016 (the date of the preliminary approval hearing), the Eligible Seller Identification Period will run until September 16, 2016, the same date as the Opt-Out Deadline. Eligible Sellers who do not identify themselves during that time period will not be eligible for a Restitution Payment under this Class Action Agreement."

Finally, if you look at the following text (p.17):
"Certain former owners who sold or transferred ownership of their Eligible Vehicles after September 18, 2015, but before June 28, 2016 (i.e., Eligible Sellers), will be entitled, if they do not opt out of the Class, to a portion of the Owner Restitution for their Eligible Vehicles."

I underlined the last part. The restitution is tied to the vehicle, so if someone else gets half of it, I read that as only allowing half for you (or your wife).

This means it's very important to know the full recent sales history for a car if you are hoping to cash in and get the full buyout (including the restitution portion). If it's at a dealer now.....but changed hands in the last 9 months, the dealer may be in a position to get half the restitution...which would certainly impact the economics!

I purchased a 2014 Passat DSG / Sunroof on June 30th for $16,500. I assume I will know by the end of July if this was smart or stupid. My Golf will be sold back, this Passat might not, depending on what my options really are.

Flogger said:

I purchased a 2014 Passat DSG / Sunroof on June 30th for $16,500. I assume I will know by the end of July if this was smart or stupid. My Golf will be sold back, this Passat might not, depending on what my options really are.

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That seems like a great deal depending on mileage even if you just get the car and no cash.


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uncle fishhead said:

The first result from a "TDI for sale" google search finds a 2015 Jetta 4D SEL TDI in Seattle for $20,991. The buyback w/o considering mileage is $28K (and the mileage is very low...so it will actually be higher). You can buy this car, drive it for two years, and make $7K! There are many other candidates. Or just park it for 3 months and make 7K. So I predict prices will now start to rise.

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Yes. You could find someone living under a rock, take advantage and get their settlement money. But why any person in the know would sell a car for less than they're going to make in a settlement is beyond me. You're 100% right. Prices should go up.

I'm tempted to post ours for sale at the buyback price just out of curiosity

So owners who purchase after June 28 2016 get full buyback?

youngman said:

So owners who purchase after June 28 2016 get full buyback?

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It seems like yes, but careful reading of the settlement suggests that a car purchased on or after 6/28 and that was in inventory at a VW dealer on 6/28 (even if purchased later from somebody else) is ineligible for any buyback, repair or compensation because it wouldn't be an "Eligible Vehicle".

I am glad this conversation is happening…I've been thinking of a similar thing.

Assuming:
1) I can find a dealer that has a TDI with <98k miles
2) AND that TDI costs under $20k
3) AND that dealer is willing to take my TDI as a trade-in
4) AND the trade-in price is at or near VW's buyback number...

I will sell them my 2011 Jetta TDI and buy a lower milage TDI from them…end game I still have a TDI (hopefully a Golf) and now it has lower miles. I would not sell the newer TDI to VW, and I don't care about fix-it-cash.

Question is…could I do this? What would be the status of the newer TDI? Could I get it "Fixed" for free (again, I don't care about cash with a fix)?

I hope this all made sense

I think these vehicles have been increasing every day as people learn. And I think you can buy a car from a dealer right now and you would be covered as a50% owner. Some folks have been concerned by
2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (1) covered, or purported to be covered, by the EPA Test Groups in the table immediately below this paragraph; (2) registered with a state Department of Motor Vehicles or equivalent agency or held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016;

But I don't think people are reading it properly due to the ORs. I read it as
2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (registered with a state Department of Motor Vehicles or equivalent agency) or (held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016)

So you just have to be a class member, an eligible owner, have a 2.0 l TDI car that has clean title, and it is registered with a state. This makes sense given they have to buyback or modify all the cars. I am not sure what the second part is defending against - my guess is that VW dealers don't have eligible vehicles.

I was in one dealer over the weekend and saw several people buying used non-certified tdi's to drive for two years and turn it over- free car for two years plus some money.

Leeshepard said:

It seems like yes, but careful reading of the settlement suggests that a car purchased on or after 6/28 and that was in inventory at a VW dealer on 6/28 (even if purchased later from somebody else) is ineligible for any buyback, repair or compensation because it wouldn't be an "Eligible Vehicle".

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This is what is confusing to me. I bought 2015 Jetta TDI se with 28k miles on the 1st of this month. Won't be able to register till the 15th.$17990 before tax. Do I quality?
I've read and reread this, I'm still confused.

I personally don't agree with what that person wrote. The definition of an eligible vehicle is:

2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (1) covered, or purported to be covered, by the EPA Test Groups in the table immediately below this paragraph; (2) registered with a state Department of Motor Vehicles or equivalent agency or held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016;

I read the (2) as

registered with a state Department of Motor Vehicles or equivalent agency
OR
held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016

This is ambiguous, but this is how you grammatically write English. I also think it meets the intent of the other parts of the document including who a class member is and who an eligible owner is. Further, if they didn't want you to be eligible after buying a used car from an independent dealership(who are selling used cars that are vw and non-vw) after 6/28 they would have said so. Think about it, what difference does it make?

I think this language was inserted strictly for dealerships stating that non-vw dealerships holding a car is eligible but vw dealerships are not.

In other words, as soon as your vehicle is registered with a state, it is an eligible vehicle regardless of source and date that occurred.

Msmiljanic said:

I personally don't agree with what that person wrote. The definition of an eligible vehicle is:
2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (1) covered, or purported to be covered, by the EPA Test Groups in the table immediately below this paragraph; (2) registered with a state Department of Motor Vehicles or equivalent agency or held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016;
I read the (2) as
registered with a state Department of Motor Vehicles or equivalent agency
OR
held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016
This is ambiguous, but this is how you grammatically write English. I also think it meets the intent of the other parts of the document including who a class member is and who an eligible owner is. Further, if they didn't want you to be eligible after buying a used car from an independent dealership(who are selling used cars that are vw and non-vw) after 6/28 they would have said so. Think about it, what difference does it make?
I think this language was inserted strictly for dealerships stating that non-vw dealerships holding a car is eligible but vw dealerships are not.
In other words, as soon as your vehicle is registered with a state, it is an eligible vehicle regardless of source and date that occurred.

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Would a car owned by a vw dealer in used inventory on 6/28 be registered with the state on that date? Important question for me since I bought a tdi from a dealer on 6/28.

Leeshepard said:

Would a car owned by a vw dealer in used inventory on 6/28 be registered with the state on that date? Important question for me since I bought a tdi from a dealer on 6/28.

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In most states, "registered with the state" means it has license plates issued to that specific car. Registration is for road use; it is separate from title, which deals with ownership. I can own a car (titled in my name) without registering it; I just cannot drive or park it on public roadways. In some states, it cannot be visible from public roads, i.e. parked in my driveway.

In the few places I've lived, cars owned by dealers don't have unit-specific license plates. They are not registered for use on the public roads; for a test drive the sales staff attaches a "dealer plate" that is used on multiple vehicles as test drives occur. It's a recognition that vehicles in a dealer's inventory don't accrue significant mileage on the public roads, so they're allowed to avoid the "registration fee."

Short answer to your question: NO.

Leeshepard said:

Would a car owned by a vw dealer in used inventory on 6/28 be registered with the state on that date? Important question for me since I bought a tdi from a dealer on 6/28.

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I read that section as, it has to be register/tagged or in the process of being tagged by a NON VW dealer (ie, you are financing it and/or transferring ownership) as of 6/28/2016.

I am not sure why it has to be a NON VW dealer to qualify, unless the VW dealers have not been give clearance to sell any impacted TDI's (used or new).

If you buy one or more vehicles now in the hopes of profiting on the buyback, please keep it to yourself until after the comment period is over and the deal terms are final. I am sure you can imagine a tweak to the terms that would screw this up for you in the name of being "fair" to the poor guy who sold after 6/28.

Plenty of time to post after your profits are locked in... Thanks for being smart about this.

Trade Wind said:

If you buy one or more vehicles now in the hopes of profiting on the buyback, please keep it to yourself until after the comment period is over and the deal terms are final. I am sure you can imagine a tweak to the terms that would screw this up for you in the name of being "fair" to the poor guy who sold after 6/28.

Plenty of time to post after your profits are locked in... Thanks for being smart about this.

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Everyone stop talking and discussing NOW. Tradewind is getting nervous. BE SMART!

In fact do not have any inner monolog with yourself as VW is monitoring your thoughts.

if discussion on a web forum hurts the possibility of profiteering at the expense of people who didn't find out about the settlement yet, that's just a natural consequence. Maybe you'll get lucky and get a free car for 2 years, and maybe you won't. Anyone that buys now is aware of the situation, so can anticipate the possibility they won't get rewarded.

Better for VW to have a car in the hands of someone who knows what is going on, vs one that has no clue.

Oh Shoot! Did I just say that out loud?

For purchases subsequent to 28 June to be eligible for buyback, the car must be bought from an eligible owner. Dealers as I see it are not eligible owners since the car is never titled to them. Very sticky point. Thoughts on how I am reading the proposed settlement.

Airpizz6 said:

For purchases subsequent to 28 June to be eligible for buyback, the car must be bought from an eligible owner.

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(citation needed)

Msmiljanic said:

But I don't think people are reading it properly due to the ORs. I read it as

2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (registered with a state Department of Motor Vehicles or equivalent agency) or (held by bill of sale by a non-Volkswagen Dealer in the United States or its territories as of June 28, 2016).

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I read the ORs as

2.33. “Eligible Vehicle” means Model Year 2009 through 2015 Volkswagen and Audi light-duty vehicles equipped with 2.0-liter TDI engines that are (registered with a state Department of Motor Vehicles or equivalent agency) or (held by bill of sale by a non-Volkswagen Dealer) in the United States or its territories as of June 28, 2016.

Any attorneys here?

I think the first may make more sense grammatically. But there's a chance version I wrote was intent and the July 29 revisit gets 2.33 rewrote to clarify as anything after June 28 you're SOL.

Look on CL. Numbers of CR TDIs for sale from private owners have fallen to almost zero. Dealers still have them, as I think if the car wasn't titled at the time of the settlement announcement it's not eligible. Those CRs are inexpensive. For example, '12-13 Passats are selling in the low to mid-teens.

Looked at another way, values for CRs have risen for current owners, but there's only one customer: VW. I think you'd be hard-pressed to find an individual buyer who would pay what VW is paying for your car, unless they're just desperate to own a TDI and can't find what they want at a dealer.

IndigoBlueWagon said:

Look on CL. Numbers of CR TDIs for sale from private owners have fallen to almost zero. Dealers still have them, as I think if the car wasn't titled at the time of the settlement announcement it's not eligible. Those CRs are inexpensive. For example, '12-13 Passats are selling in the low to mid-teens.

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Interesting point. So anyone who purchases a used TDI from a VW dealer after June 28th is not elligble for emmisions fix or buyback? Why is VW allowing VW dealers to continue selling TDIs, post 6/28?

Not sure. I'm reading conflicting info on that. And I wrote "dealer," not "VW dealer." However, I've seen TDIs advertised for sale from VW dealers. Hard to tell if they're legit or ads that just haven't been taken down. FWIW, VW dealers were allowed to sell used TDIs up until June 28. Just not CPO.