Why Are Used TDI Car Prices Getting Soft?

aja8888 · Oct 31, 2008

I thought I would put up a poll for your vote (if any) as to the percieved reasons why the cost/value of used TDI's is apparently dropping. Posters' commentary is welcome but please keep politics out of this (I know that is asking a lot here).

You can pick more than one selection above..

Tony

dieseldorf · Oct 31, 2008

There is a new 2009MY CRD car out that makes the 2006 cars appear 3 years old already! These new, de-contented cars carry a lower MSRP, too.
Diesel prices were $4- $5 recently
Americans don't really understand the concept of stewardship or conservation

Farfromovin · Oct 31, 2008

I concur with dieseldorf's top reason. would've voted for that, but it's not an option on your poll LOL.

aja8888 · Oct 31, 2008

Farfromovin said:
I concur with dieseldorf's top reason. would've voted for that, but it's not an option on your poll LOL.

I thought about that, but I am not convinced that people who have the option (or desire) to buy a used TDI also have the funds (or desire) to by a new one given their cost and scarcity. For instance, I have the desire to buy another used TDI, and have the funds to by it, or even a new one, but I really only need a used one (for a college kid). Bottom line is I don't see how the limited number and availability of new TDI's is having a big impact on the prices for used ones.

CNDTDI · Oct 31, 2008

just diesel prices makes people look the other way, today in Ottawa, Canada its 85 cents for gas as for diesel is still at 105 cents, and when you look at the amount of people who do short distance driving (i guess probably well over 70%), it is cheaper to go gas than diesel.

aja8888 · Oct 31, 2008

We are starting to see large price differences here in the states also. It's almost (or therabouts) a $1.00 difference per gallon ($2.00 for RUG vs. $3.00+ for D2).

weedeater · Oct 31, 2008

It can be around $1 a gallon difference around here. That's a lot.

NMRJock · Oct 31, 2008

aja8888 said:
I thought about that, but I am not convinced that people who have the option (or desire) to buy a used TDI also have the funds (or desire) to by a new one given their cost and scarcity. For instance, I have the desire to buy another used TDI, and have the funds to by it, or even a new one, but I really only need a used one (for a college kid). Bottom line is I don't see how the limited number and availability of new TDI's is having a big impact on the prices for used ones.

But that's not everybody. We were going to buy an '05.5 or '06 but waited and got our '09. Enough of us doing that hurts the '05.5-'06 market. Cheaper '05.5-'06 TDIs will make the MkIVs less competitive and drive those prices down, etc.

I also agree that the price gap between RUG and diesel is hurting TDIs a lot. Only enthusiast type buyers are willing to ignore it.

Finally, the cars are just starting to get older. Naturally the prices will fall as they get older and accumulate more miles.

aja8888 · Oct 31, 2008

NMRJock said:
(snip)....Finally, the cars are just starting to get older. Naturally the prices will fall as they get older and accumulate more miles.

Well, on this point let me say that I suspect that the used TDI's are on the market a lot longer than they were a year ago. When I bought my Golf last December, if you didn't move fast on a TDI car, you missed it. That went for here, Craigslist or eBay. I missed quite a few...

One fellow on this site sold an 06 (or 05) this spring for damn near what he paid for it (sight unseen and shipped to the coast). Now I see that model in very nice shape stay for sale for 60+ days (or longer until the price is reduced). I have seen several not get sold on eBay for anywhere near the reserve.

Tony

mfinca · Nov 1, 2008

I do think the 09s are draging the used TDI prices down. I was looking for a low mile unit with the features I wanted, but people were asking almost $20k. I bought my 09 manusl six weeks ago for less than $22k plus tax and license (minus the rebate). New car, a stock 140hp, all of the options I wanted and then some and in the exact color combo I wanted, it wasn't a tough choice.

MJ72 · Nov 1, 2008

The '09's have to play a role as all of our TDI's just got 3 years older. And even though they only trickling into the U.S. now, there's the assumption of enough future supply to meet demand.

thebigarniedog · Nov 1, 2008

aja8888 said:
I thought I would put up a poll for your vote (if any) as to the percieved reasons why the cost/value of used TDI's is apparently dropping. Posters' commentary is welcome but please keep politics out of this (I know that is asking a lot here).

You can pick more than one selection above..

Tony

I guess the poll pre-supposes the answer that used tdi prices are dropping, but are they? That is and would be the better question IMHO. Here's my thoughts on this: The 2009 redesign has set a cap on all used tdi prices (obviously). If I can buy a new 2009 for $22,000 then by definition all older tdi's must vie for a spot below this point. This price point is getting crowded. Another problem, price wise, is the 2006 tdi is visually indistinquishable from the 2009. A mistake by VW in launching the CR in a soon to be replaced body design that is a love it or hate it design to start with. So one would think that a well kept and serviced 2006 should hold a premium.

Yet, the 2006 owners that are trying to sell have run into this compressed price point wall. A well kept, low mileage MK4 seems to occupy the $10(k)-$15(k) arena .... so the 2006 owners are forced between $15(k)-$21(k). At this price point, most used tdi buyers probably will opt for a new car. The 2006 may fast become the red headed step child of tdis. The 2009 may occupy the same place in a year or so when the CR is launched in the new body style it deserves.

Notes: the used Junkers out there that have been abused occupy a different category/ price point.

mdsrs · Nov 1, 2008

Does anyone know why diesel prices in Europe[Germany] compared to gas prices are about the same yet in the USA they're not? mdsrs

rabid_chihuahua · Nov 1, 2008

mdsrs said:
Does anyone know why diesel prices in Europe[Germany] compared to gas prices are about the same yet in the USA they're not? mdsrs

Taxes and taxes levied on taxes.

http://de.wikipedia.org/wiki/Benzin#Steuern
Fuel taxes in Germany are €0.4704 per Liter for ultra-low sulphur Diesel and €0.6545 per Liter for conventional unleaded petrol, plus Value Added Tax (19%) on the fuel itself and the Fuel Tax.

so, if the fuel were to be given away for free, it would still cost a minimum of 3.75 USD per US Gallon for Gasoline and 2.70 USD per US Gallon for Diesel just to cover the taxes. The taxes are weighted to give an advantage to diesel.

(1EUR=1.275USD)

XXX_er · Nov 1, 2008

when I bought my TDi in 01 for business I based it on paying an average of 12cents a litre less for diesal in northern BC and the figures worked as planned for the next 5 years I used the golf for business .

Since then diesal has gone up to an average of 10cnets a litre more than regular ,I like the golf ,I even bought 2 the exact samecolor & everything ,I really have had no issues with either TDi's in 340,000kms but based on the math I doubt I would buy one today

jrivers804 · Nov 2, 2008

New TDIs for sale would me the main reason I think used TDI prices have dropped. For almost two years you could not buy a new TDI. Now you can or at least the perception is that one can buy a new TDI for 22k or something like that. So, IMO, you should have definitely included that as a choice in your poll.

DoctorDawg · Nov 2, 2008

I'm a living example. Wanted a TDI bad, but couldn't force myself to pay a new-car price for a used car, so I bought an '09 as soon as they appeared. Fewer buyers = lower demand = lower prices.

I suspect that used TDIs will continue to carry a modest premium, since there are folks out there who don't like the idea of the '09s complex and expensive emissions system and slightly reduced fuel economy, or who want to burn biodiesel higher than B05, which is a bad idea in the '09. But the premium will be modest. The days of selling your '06 with 50K on the clock for as much as or more than you paid for it are past.

TornadoRed · Nov 2, 2008

thebigarniedog said:
Here's my thoughts on this: The 2009 redesign has set a cap on all used tdi prices (obviously). If I can buy a new 2009 for $22,000 then by definition all older tdi's must vie for a spot below this point. This price point is getting crowded.

I have argued in the past that the 2009 TDIs would cut the demand for 2005.5s and 2006's, but wouldn't affect the prices for older TDIs.

But you may be right. As the new Jetta TDIs push the price for slightly-used down, this must be having some effect on the even older ones.

And do not forget -- no matter how clean they are kept, not matter how well they are maintained, the 2004s and 2003s and 2002s are getting older and accumulating more miles. Every car depreciates as it accumulates miles... the temporary shortage of TDIs during a period of rapid fuel price increases created a special situation, which no longer exists.

Edit: Edmunds.com shows that my Golf has a private-party TMV of about $8750. That's about $700-800 less than six months ago, with not much change in the number of miles.

aja8888 · Nov 2, 2008

I have to agree that the 2009's (TDI's) have created a pricing issue for 2005 - 2006 TDI's as seen by several For Sale postings here. Also, eBay sales of those cars has been soft from what I can see. While TR says the older models are, in fact, now older, their prices are dropping proportionately, and he is correct.

But given my percieved increase in the *amount* of TDI's for sale now, and the slowness (from what I can tell) of sales, I sense other factors are also creating price pressure. The poll idicates that the RUG/Diesel price spread is the big factor in falling sales demand. When I talk up diesels at work, the guys and gals say they are looking at buying gassers since the gasoline prices are way down and there are "deals a pleanty" right now. This is a small sample of people, however.

On a side note: Our local Ford dealer is selling 2008 F 150's at 40% off MSRP! Two guys at work bought new 2008 Honda Civics at between $18 - $20K out the door in the last three months. I talked up diesels to them before the purchase.

I probably should have listed a choice for the 2009 VW TDI's as having an impact on used TDI prices in the poll, but I did not. I can't remember why I did not make that a choice, but I think it only really has a material effect on 2005 - 2006 PD TDIs since those years seem to be the most traded/sold for cash to get into a 2009.

gmcjetpilot · Nov 2, 2008

You forgot PUBLIC negative perception of Diesels (supported but dumb media)

Lets face it through the 70's and 80's passenger and small pickup truck diesels where not that good. They where loud, dirty and many where crap, failed and not reliable like a diesel should. Of course that mind set is in concrete. Woman hate the smell at the pump. May back in the day when full service was popular it was not a big deal.

As a Kid in the 70's some of my different friends parents tried the NEW diesels of the day. The Buick & GM cars had gas engine bottoms converted to diesels. The early VW's where under powered and not much more efficient over the 1st Gen of Honda Civics getting near 50 mpg.

It might take another decade to change opinions. In Europe I think 1/2 the cars being sold now are diesels. I suppose more fuel supply being made into diesel lowers cost?

However even Euro opinions can be anti diesel. Ever watch BBC's "Top Gear". They often bash diesels. However some of the TOP O LINE Mercedes and Audi's are coming out in both Gas and Diesels; the Diesel gives up nothing on the race road course. Audi has that diesel 24 Hr Lemans race car that finished first I recall. Audi has a sports car coming out with diesel that is suppose to get into the HIGH speed range, like most top end sports cars.

We know they are cool but most people are not as smart as us.

aja8888 · Nov 2, 2008

gmcjetpilot said:
(snip...) We know they are cool but most people are not as smart as us.

I have to agree 100% on that!

rcnaylor · Nov 4, 2008

I'm with DD.

First, there was a bit of a monopoly on used TDI's. That always keeps prices up. New 09's ended that.

Diesel prices being up doesn't look good to average buyer who isn't really studying overall savings.

If diesel prices move back to their historic correlation with gas, used TDI prices should hold up fine. Not as great as during the artificial drought VW gave us on new ones, but fine.

dieseldorf · Nov 4, 2008

There are way too many cars for sale right now. The allure of that fresh '09 model has pushed too many owners of PD cars right over the edge!

I'd be selling now only if forced to do so. Selling because my 1 year old car now appears "old" when viewing the CRD is not a solid decision.

aja8888 · Nov 4, 2008

dieseldorf said:
There are way too many cars for sale right now. The allure of that fresh '09 model has pushed too many owners of PD cars right over the edge!

I'd be selling now only if forced to do so. Selling because my 1 year old car now appears "old" when viewing the CRD is not a solid decision.

Well, DD, I am actually poking around the dealerships looking at pricing for a new 09 TDI and thinking about either selling my Golf or storing it for a year to pass along to a granddaughter. I am also looking at clean, low mileage 06 TDI Jettas for a good deal. I'm saying I am getting caught up in the craze.

Powder Hound · Nov 4, 2008

I agree with 4 of the 5 choices given. To varying degrees, they're all pretty much valid. The only one I didn't like was the idea of people holding off and waiting for other choices to appear. The vast majority are still not aware that clean diesels exist, and don't like the fuel price spread if they did, so they'll still reject diesels, before the math comes up.

I can show someone how I'm still paying less per mile, but the hype-bird owners are still smug and self righteous in their own estimation. So be it, as they might be close, until they have to figure out how to pay for the battery regen. I don't think that other than a small number will keep the car for that long anyway - so they'll lose to me no matter what. My car, at 236k+ miles is just getting going.

And, as usual, long term in most people's minds is the end of the next quarter, so this thinking I won't have to buy another new car again is just crazy talk for most people I know.

The upshot: let the used car prices soften. I need a winter beater!

dieseldorf · Nov 4, 2008

aja8888 said:
I'm saying I am getting caught up in the craze.

Store, don't sell, T.

You're going to see the traditional levels of discounting on these cars very soon. Don't take a beating getting out of a used TDI right now. These cars have carried unprecedented resale value over the past 10 yrs. We're just in a bit of a dip right now

dieseldorf · Nov 4, 2008

I'll tell ya, with gasoline prices that have plummeted over the past couple weeks, purchasing a diesel-powered auto is likely the most distant thought for the majority of folks apart from those early adopters who are having their fill right now. Once that initial demand is satisfied, I'll bet these new CRD cars start to sit due to over-production and no demand.

He||, I’ll bet we start to see SUV/pickup sales start to move again. There are some crazy deals out there - - used and new

and we're closing in on $2/gallon for RUG in my local area.

aja8888 · Nov 4, 2008

dieseldorf said:
Store, don't sell, T.

You're going to see the traditional levels of discounting on these cars very soon. Don't take a beating getting out of a used TDI right now. These cars have carried unprecedented resale value over the past 10 yrs. We're just in a bit of a dip right now

Yeah, need to clear my head a bit. I like the Golf too much and have a lot of TLC in it to just sell it at a depressed price. Plus, the granddaughter will need a car for college and her parents are having a tough time just making ends meet. I guess that is what we have grandparents for (at least these days)

.

Now to be patient and maybe look at a longer term replacement for the Golf. I have time, and it probably will pay to sit back and see how the market for diesels goes into the new year.

TornadoRed · Nov 4, 2008

dieseldorf said:
]He||, I’ll bet we start to see SUV/pickup sales start to move again. There are some crazy deals out there - - used and new and we're closing in on $2/gallon for RUG in my local area.

If anyone needs a new pickup, right now there are incredible deals out there. It doesn't matter if gasoline prices go back up (they will), if you need a pickup then you should buy right now.

DoctorDawg · Nov 6, 2008

I have to admit that I occasionally find it a mite irksome that shortly after I dump a bunch of cash on the diesel sedan I've yearned for for years, whammo, the price of oil crashes and, because its winter, the diesel/gas price advantage purty much disappears, leaving me paying more per mile than the gassers are. But ya know what? I remind myself that its mostly people who know squat about diesels who base their decision solely on the cost per mile calculation. I love everything about diesels: I love the huge power packed in a compact little engine, I love the sound, I love the engine's incredible reliability, I love the fact that I'm now producing 30-50% less greenhouse gas emissions, and contributing 30-50% less to our national strategic insecurity.

And, when I think about it just a little bit longer, I love the fact that this too shall pass, and before ya know it oil will be back up to $100/barrel and my cost per mile advantage will be back.

Why Are Used TDI Car Prices Getting Soft?

What's the reason for soft used TDI car pricing trends?

The USA is going into a recession?

Rapid gasoline cost drop making buyers go to gassers?

Diesel fuel cost spread disparity over gasoline?

People holding off for new Asian/other diesel entries?

Hybrid "hype" overshadowing diesel engine economies?

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