"Clean Trade" - What were they thinking

Ok, so I just had an "aha!" moment on why the plaintiff's representatives settled on September 2015 clean trade value as the basis, rather than some higher (e.g. private sale) basis.

It's because if you are taking the buyback, you are voluntarily trading in the car to VW, with the expectation that you will probably go get a new one. The 20% + $3k make up for the hassle, taxes, fees, etc. I really expect that this is all the thinking that went into it. VW is acting as any dealer would, and giving you fair value (for a dealer,) and giving you additional compensation for the trouble.

It's not a "forced" buyback/recall, such as in the case of an irreparable safety defect. You have the option to continue driving the exact car that you bought for as long as you want (or it lasts), or get cash to have it fixed (if available).

I'm not saying don't file comments on the proposed settlements (DOJ now, class action after preliminary approval) fighting for a higher valuation (I will be doing just that). I'm just pointing out what their thought process may have been.

That's kinda the way I thought right from the start, unless we make an immediate trade we're going to lose the taxes. Thnx for digging around.

fredthe said:

Ok, so I just had an "aha!" moment on why the plaintiff's representatives settled on September 2015 clean trade value as the basis, rather than some higher (e.g. private sale) basis.
It's because if you are taking the buyback, you are voluntarily trading in the car to VW, with the expectation that you will probably go get a new one. The 20% + $3k make up for the hassle, taxes, fees, etc. I really expect that this is all the thinking that went into it. VW is acting as any dealer would, and giving you fair value (for a dealer,) and giving you additional compensation for the trouble.
It's not a "forced" buyback/recall, such as in the case of an irreparable safety defect. You have the option to continue driving the exact car that you bought for as long as you want (or it lasts), or get cash to have it fixed (if available).
I'm not saying don't file comments on the proposed settlements (DOJ now, class action after preliminary approval) fighting for a higher valuation (I will be doing just that). I'm just pointing out what their thought process may have been.

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I don't know if that's exactly how it is and no one here really does. If you read the transcripts from the Judge and various other officials in the case (EPA, Carb, ect.) It would seem that there is some amount of the money for the fraud that is supposed to be given to the consumers as damages. The damages are numerous but not everyone here agrees on what they are exactly so I'll just stick to a few that most can agree on which are the additional taxes we will pay to buy a new vehicle and the hassle of having to deal with this on top of being sold a defective product. I know the cars work fine but being that they were sold in an illegal configuration they can be seen as defective. I digress, the compensation for the fraud is a separate lump of money than the buy back offer. If you look at the table the numbers are combined but I really think that is to keep too many folks from realizing what they are getting for the car before the rest of the damages are added on.

The buy back is strictly VW buying your car back at a specific value and there is some back and forth on if using clean trade in was ever intended by the judge or others associated with the decision making in the process. I don't believe that VW should be allowed to use the aforementioned owner restitution money to bring the total amount up to the bare minimum offer that will entice 85% of consumers if that is infact what they did by choosing the lowest of the NADA value figures. If the CAS gets approved in it's current form I guess that clean trade in was either intended and agreed upon by the court or it slipped past them but I doubt such a large detail would simply slip.

TLDR; we all have to wait until the preliminary settlement approval to find out if the numbers in the chart are 100% accurate. It's been speculated by some that the court may have intended that VW pay clean retail in which case we will see that in our initial offer from VW.

What the court intended was to bloviate about "fair market value + generous compensation" then settle on a lowball offer, hold a press conference, and declare victory. Mission accomplished.

No one's twisting arms to accept the buyback. Keep the car, take the $ for the "fix" and then fix it back later if it makes you happy.

Jimmy Coconuts said:

No one's twisting arms to accept the buyback. Keep the car, take the $ for the "fix" and then fix it back later if it makes you happy.

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Which of the fixes is approved and will be ready this year? If my car is stolen or totaled I still get the money right? It's too much of a risk for many including myself. If the car gets wrecked instead of getting the $28.5k I get probably 19 or 20.

Also im not sure what you mean about unless we make an immediate trade we lose the taxes. Even if you take VW's buy back offer and buy a car the same day your going to pay the taxes. It's not a trade-in, you're selling your vehicle to them. The sale and subsequent purchase of a new vehicle are two separate transactions. Something tells me VW will incentivize the purchase of a new VW in some kind of manner where they will tap a magic wand on a hat and make it seem like you're not paying taxes on a new purchase which will just basically be some $ off a new VW. Probably not going to be helping anyone who is changing brands.

RollingCoal said:

Also im not sure what you mean about unless we make an immediate trade we lose the taxes. Even if you take VW's buy back offer and buy a car the same day your going to pay the taxes. It's not a trade-in, you're selling your vehicle to them.

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Where I live if at the time of "trading in" my Jetta I purchased another vehicle from the dealership I would get a tax credit for the trade in amount.

S2000_guy said:

What the court intended was to bloviate about "fair market value + generous compensation" then settle on a lowball offer, hold a press conference, and declare victory. Mission accomplished.

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a "lowball offer" that's within a few points of being the price one could buy the car at retail 2+ years prior.

tobianogreg said:

Where I live if at the time of "trading in" my Jetta I purchased another vehicle from the dealership I would get a tax credit for the trade in amount.

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Consider yourself lucky, we get to pay full sales tax on every single car, save a $3000 price reduction your trade could generate (not $3000 in tax, $3000 in price), which really helps when trading a 20k car.