The Future of the TDI?

I'm looking to replace my 2013 Jetta with a 2015 Passat or Jetta TDI. But I have to wonder what the future is of the TDI? A few months back, I posted a question of whether we'll be seeing 2019 TDIs, and the answer was a firm "No". But now I have to wonder if there will ever be a TDI manufactured by VW again. What does the audience here think?

And if the answer to that question is "No", how does that affect the value of current TDIs? Will their value decline precipitously because the diesel has fallen out of favor? Or will they become kind of collectibles and hold their value very well?

Wondering what the crowd here thinks . . .

"... manufactured by VW again" ... Yes, they're still coming off the assembly line brand new as we speak.

That is a different question from "... sold by VW in North America again", and I think the answer to that one is no.

These aren't collector cars. Resale value is anybody's guess. Right now the "fixed" cars are under warranty. What happens after those start expiring? I wouldn't want to own one of these out of warranty.

I think the clock is ticking on automotive internal combustion engines in general. At best we might squeeze 45-50% thermal efficiency from them. It will be increasingly hard for them to compete with 90% efficient electric motors. I'm thinking of picking up a NA or NB miata, BRZ, or some other classic sports car for one last ICE huzzah. If any of the tdi's become collectibles, it won't be the latest gens.

There is no answer for your question. Buy one or don't, that is your choice. I didn't buy mine as an "investment" as 99% of cars are not investments but depreciating assets.

GoFaster said:

That is a different question from "... sold by VW in North America again", and I think the answer to that one is no.

These aren't collector cars. Resale value is anybody's guess. Right now the "fixed" cars are under warranty. What happens after those start expiring? I wouldn't want to own one of these out of warranty.

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Yes, that's what I meant, North America.

I guess "collector car" was the wrong phrase. I guess what I was asking is if there may be a following by hardcore lovers (many of whom might be on this forum) of the TDI that will maintain a demand for these cars as the years go by. I would hate to find out that in 5 - 8 years, nobody wants these cars anymore, and their value plummets.

turbobrick240 said:

I'm thinking of picking up a NA or NB miata, BRZ, or some other classic sports car for one last ICE huzzah.

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I'm thinking of picking up an old, low mileage, Porsche Boxster as a 8 months a year Sunday fun car.

DieselMann99 said:

I'm thinking of picking up an old, low mileage, Porsche Boxster as a 8 months a year Sunday fun car.

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Nice. Those are on my short list too. They'd be right at the top if there were no IMS bearing concerns. I think Porsche fixed that design around the '08 model year.

turbobrick240 said:

Nice. Those are on my short list too. They'd be right at the top if there were no IMS bearing concerns. I think Porsche fixed that design around the '08 model year.

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I've been reading up a lot on the IMS bearing issue. The 2009 MY is when it all went away when they used a new engine starting in the 2009 MY that didn't even have an Intermediate Shaft. But the 2009's are a lot more expensive than the earlier ones. The worst MYs are 2000-2005 which used a single row bearing which had the highest failure rate, about 8%. The pre-2000 MYs used a double row bearing that had a 1% failure rate. The 2006-2008 used a larger single row bearing, but it was not serviceable or replaceable. If it failed, you replace the engine. No chance for a pre-emptive fix, like with the earlier MYs. Not good.

I'm looking at 1998/1999. You can find good low mileage ones for ~$10k.

Study up on the IMS, it's a concern that's manageable and there's a very high probability that you'll never have a problem. The earlier Boxsters have got to be one of the best Bang-For-The-Bucks sports car out there. I know guys who said they'd rather drive a Boxster than a Carrera.

I think the clock is ticking on automotive internal combustion engines in general. At best we might squeeze 45-50% thermal efficiency from them. It will be increasingly hard for them to compete with 90% efficient electric motors. I'm thinking of picking up a NA or NB miata, BRZ, or some other classic sports car for one last ICE huzzah. If any of the tdi's become collectibles, it won't be the latest gens.

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Certainly, electric provides advantages over ICE in some conditions, however I think we are a substantially long way from seeing electric being competitive with ICE engines in a business sense, especially considering how massively subsidized electric cars currently are and the lack of national infrastructure to accommodate mass ownership of electric.

There are a substantial amount of assumptions which are just that until they can be proven in the market.

One consideration is that diesel is not going anywhere anytime soon with respect to long-term transport of goods. The cost of commercial diesel is shared in the refining process with small-scale ICE engines (i.e. individual car owners). If all of those car owners go away and use electric cars, will the price of diesel transport multiply overnight? There are similar calculations that need to be balanced out with grid capacity as the grid is currently at max capacity in many areas with the recent heat wave.

h.ubk

There is no answer for your question. Buy one or don't, that is your choice. I didn't buy mine as an "investment" as 99% of cars are not investments but depreciating assets.

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My cars are investments. By paying in cash and doing DIY repairs, I save money on license and insurance fees, dealer repair costs and avoid paying interest to banks. When I total up the number of miles vs. buying a new car and end up on top, my investment is generating ROI.

But, as far as buying a car and selling it for a profit, you would need an extremely rare/and or high demand model with unique characteristics. I can see the nostalgia people have for early VWs like the bug and some of the vans. I just don't see that nostalgia ever translating into the Tdis.

h.ubk

You are fooling yourself. Your car generates no income. That is what investments are. Your car will never be worth more than the day you bought it and it won't generate income along the way. You may pay less to own and keep it up but it is still depreciating to zero without generating any income.

DieselMann99 said:

Yes, that's what I meant, North America.



I guess "collector car" was the wrong phrase. I guess what I was asking is if there may be a following by hardcore lovers (many of whom might be on this forum) of the TDI that will maintain a demand for these cars as the years go by. I would hate to find out that in 5 - 8 years, nobody wants these cars anymore, and their value plummets.

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Will there be that one “unicorn” 6-speed manual wagon listed for sale at a premium and a buyer that absolutely has to have one? Probably.

For everything else...
I can’t imagine a scenario 5+ years from now, where high mileage, out of warranty CRs are considered valuable. Fuel system and exhaust repairs can be expensive.

I’ve seen a few reasonably priced DSG sedans listed in my area that aren’t selling as it is.

h.ubk said:

Certainly, electric provides advantages over ICE in some conditions, however I think we are a substantially long way from seeing electric being competitive with ICE engines in a business sense, especially considering how massively subsidized electric cars currently are and the lack of national infrastructure to accommodate mass ownership of electric.

There are a substantial amount of assumptions which are just that until they can be proven in the market.

One consideration is that diesel is not going anywhere anytime soon with respect to long-term transport of goods. The cost of commercial diesel is shared in the refining process with small-scale ICE engines (i.e. individual car owners). If all of those car owners go away and use electric cars, will the price of diesel transport multiply overnight? There are similar calculations that need to be balanced out with grid capacity as the grid is currently at max capacity in many areas with the recent heat wave.

h.ubk

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I think it is likely that electric will make inroads on transport sooner than you would guess. Transport companies are highly driven by marginal costs, and lots of short haul transport is out there. I bet the fuel costs for a UPS truck dwarf the marginal costs to make it electric, for instance. It's no accident that lots of companies are jumping in to the electric truck space. Daimler, for example. China is putting 2,000 new electric busses on the road every week.

It's no accident that lots of companies are jumping in to the electric truck space. Daimler, for example. China is putting 2,000 new electric busses on the road every week.

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I know. And, I agree electric will be a big part of the future. But, I don't think any of these buses are for long-duration transit and it still doesn't answer the questions posed about electric infrastructure and how fuel costs are calculated. I'm actually a fan of electric, but I think there are inherent limitations to how much the technology can and will be utilized due to and those will be played out in the market in the coming decade once the hype and .gov subsidies go away. Another issue for the environmentalists is many of the electric vehicles may end up being worse for the environment than ICE engines in a number of unforeseen ways.

I bet the fuel costs for a UPS truck dwarf the marginal costs to make it electric, for instance.

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Depends on what type of transport. Short-range transport, electric or hybrids make sense, but only if they can prove long-term durability and stability with the grid and electric pricing and availability. Long-range, diesel still wins. We can't even figure out how to get rid of manual transmission on high-mileage diesel trucks. I know there are automatics out there, but they make no economic sense when you consider durability, replacement cost, downtime, etc for long-range transport.

h.ubk

You are fooling yourself. Your car generates no income. That is what investments are. Your car will never be worth more than the day you bought it and it won't generate income along the way. You may pay less to own and keep it up but it is still depreciating to zero without generating any income.

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The ROI on a used vehicle is in use value which does not show up on a balance sheet, but does translate nonetheless into value when compared with alternative forms of transportation such as buying a new car. If you wanted to translate it into something you see on a balance sheet, you could take all of the money you have saved vs a new car and invest it in something income producing.

h.ubk

DieselMann99 said:

Yes, that's what I meant, North America.
I guess "collector car" was the wrong phrase. I guess what I was asking is if there may be a following by hardcore lovers (many of whom might be on this forum) of the TDI that will maintain a demand for these cars as the years go by. I would hate to find out that in 5 - 8 years, nobody wants these cars anymore, and their value plummets.

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There might be a number of hardcore fans - it's always like that - but the numbers are small compared to the number of people to whom it's just another car. Expect them to have low resale value ... just like anything else that old. If you have one and it's still running and you don't plan to sell it, what does it matter that someone says it isn't worth much (aside from what happens if it gets crashed, but there's little that can be done about that)

h.ubk said:

Certainly, electric provides advantages over ICE in some conditions, however I think we are a substantially long way from seeing electric being competitive with ICE engines in a business sense, especially considering how massively subsidized electric cars currently are and the lack of national infrastructure to accommodate mass ownership of electric.
There are a substantial amount of assumptions which are just that until they can be proven in the market.
One consideration is that diesel is not going anywhere anytime soon with respect to long-term transport of goods. The cost of commercial diesel is shared in the refining process with small-scale ICE engines (i.e. individual car owners). If all of those car owners go away and use electric cars, will the price of diesel transport multiply overnight? There are similar calculations that need to be balanced out with grid capacity as the grid is currently at max capacity in many areas with the recent heat wave.
h.ubk

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The grid is not going to be burdened as much as people think.
https://next10.org/grid-ev

My no longer available VW Passat TDI will always be worth more than a no longer available late model Ford sedan LOL.

Ripster said:

My no longer available VW Passat TDI will always be worth more than a no longer available late model Ford sedan LOL.

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It may be worth more to you . Pretty sure a used '17 or '18 Fusion hybrid titanium has way higher book value though.

GoFaster said:

There might be a number of hardcore fans - it's always like that - but the numbers are small compared to the number of people to whom it's just another car. Expect them to have low resale value ... just like anything else that old. If you have one and it's still running and you don't plan to sell it, what does it matter that someone says it isn't worth much (aside from what happens if it gets crashed, but there's little that can be done about that)

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It matters because I don't keep cars for 10 - 15 years. If I did, it wouldn't matter that much. I usually average about 5 years. And for a 5 year holding period, depreciation is the biggest expense on the car. More than fuel or insurance or maintenance. So if I buy a 2015 CPO TDI for $17k and it's worth $7k in 5 years, that cost me $2,000 a year or $10k total in depreciation. So yes, it does matter whether it's worth $7k or $5k or $12k in five years. And that's why I'm asking the question about people's thoughts on the future demand for the TDI.

DieselMann99 said:

I've been reading up a lot on the IMS bearing issue. The 2009 MY is when it all went away when they used a new engine starting in the 2009 MY that didn't even have an Intermediate Shaft. But the 2009's are a lot more expensive than the earlier ones. The worst MYs are 2000-2005 which used a single row bearing which had the highest failure rate, about 8%. The pre-2000 MYs used a double row bearing that had a 1% failure rate. The 2006-2008 used a larger single row bearing, but it was not serviceable or replaceable. If it failed, you replace the engine. No chance for a pre-emptive fix, like with the earlier MYs. Not good.

I'm looking at 1998/1999. You can find good low mileage ones for ~$10k.

Study up on the IMS, it's a concern that's manageable and there's a very high probability that you'll never have a problem. The earlier Boxsters have got to be one of the best Bang-For-The-Bucks sports car out there. I know guys who said they'd rather drive a Boxster than a Carrera.

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My uncle has a guards red '99 boxster. One of the most beautiful cars ever made, imo. It lost the IMS bearing and destroyed the engine. Though, to be fair, he bought it with 90k miles- most of which were put on as a rental in Manhattan. He also accidentally downshifted from fifth to second gear on the highway coming back from buying it. It died about 10k miles later when the timing chains skipped. He then bought a used 2.5 from a mechanic at flat six innovations. The guy had just retrofitted the motor with their improved bearing kit and put it in his boxster when he wrecked the car. That used motor/trans. was $6k! That's probably why a miata is now at the top of my list. You're right though that most of the cars don't run into that problem.

h.ubk said:

My cars are investments. By paying in cash and doing DIY repairs, I save money on license and insurance fees, dealer repair costs and avoid paying interest to banks. When I total up the number of miles vs. buying a new car and end up on top, my investment is generating ROI.

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How on earth is it "generating ROI"?

I understand that you save money on loan interest and DIY repairs. I don't understand how you save money on insurance and license fees. But it's one thing to reduce your costs, it's another thing altogether to "generate ROI".

I take it that you don't do financial analysis for a living.

turbobrick240 said:

My uncle has a guards red '99 boxster. One of the most beautiful cars ever made, imo. It lost the IMS bearing and destroyed the engine. Though, to be fair, he bought it with 90k miles- most of which were put on as a rental in Manhattan. He also accidentally downshifted from fifth to second gear on the highway coming back from buying it. It died about 10k miles later when the timing chains skipped. He then bought a used 2.5 from a mechanic at flat six innovations. The guy had just retrofitted the motor with their improved bearing kit and put it in his boxster when he wrecked the car. That used motor/trans. was $6k! That's probably why a miata is now at the top of my list. You're right though that most of the cars don't run into that problem.

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I would never buy a 1999 Boxster with 90k miles w/o the IMS changed. Or, I would reduce the purchase price by the ~$4,000 or so that it would cost to do the IMS bearing upgrade, assuming everything else on the car checks out, including oil analysis.

The ones I'm looking at all have under 35k miles. And like I said, the pre-2000 Boxsters have a much lower risk of IMS failure. Frequent oil changes, magnetic oil drain plug, revving the engine when you drive, and oil analysis are good ways to avoid/detect a problem.

I don't understand how you save money on insurance and license fees. But it's one thing to reduce your costs, it's another thing altogether to "generate ROI".

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It costs substantially less to license and insure an older vehicle on the road. The ROI comes from putting the saved money into income generating activities and investments.

h.ubk

I suspect values on CR TDIs in 5 years will be pretty low. The combination of cost of maintenance (always on the higher side with VWs) along with the unknowns of emissions and fuel systems repairs will make these cars that enthusiasts will want, but that's probably about it.

If I weren't a die-hard diesel enthusiast and planned on buying a car for a 5 year life, I'd probably stay away from at TDI. And possibly a VW altogether, even though I love them.

DieselMann99 said:

It matters because I don't keep cars for 10 - 15 years. If I did, it wouldn't matter that much. I usually average about 5 years. And for a 5 year holding period, depreciation is the biggest expense on the car. More than fuel or insurance or maintenance. So if I buy a 2015 CPO TDI for $17k and it's worth $7k in 5 years, that cost me $2,000 a year or $10k total in depreciation. So yes, it does matter whether it's worth $7k or $5k or $12k in five years. And that's why I'm asking the question about people's thoughts on the future demand for the TDI.

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By that time, these cars are going to be substantially out of warranty. By that time, there will be other choices in the market that are more attractive to the general population.

If maintaining resale value is the prime consideration ... off to Toyota or Honda you go.

DieselMann99 said:

How on earth is it "generating ROI"?

I understand that you save money on loan interest and DIY repairs. I don't understand how you save money on insurance and license fees. But it's one thing to reduce your costs, it's another thing altogether to "generate ROI".

I take it that you don't do financial analysis for a living.

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In the right situation it very much is about ROI. In my family business I'm a sales manager, and am reimbursed per mile on where i go (this is true and common for a lot of businesses, rural postal carriers, etc...). If i can keep my cost low and underneath the cost per mile of reimbursement then you are generating income. So your vehicle becomes the vehicle to create a ROI. Same thing is true for our fleet of delivery trucks, what is the payback rate, and once you hit that number anything additional is extra on the revenue producing side.

My wife works for a university and can take a state car or be reimbursed .53 per mile if they take their own! That's way more generous than our reimbursement rate. Again another example of making your car a revenue producing vehicle.

The 2013 i bought used + fuel, insurance, & repairs - reimbursement from VW & Bosch has already generated a lower cost per mile than my old MKIV did. I plan on going as long as possible with this car and generating additional income with it.

Most people dont look at cars that way but some need to... so with respect dieselman99, h.buk laid out his thoughts pretty well.

I did graduate with a degree in economics but wouldn't say i'm a financial analyst, but don't think you need to be to break this idea down.

In November, 2024, when my 2015 Q5 goes out of emissions warranty, I will probably do an emissions delete to eke another few years of relatively trouble free life out of the car. In 2027, let’s say, the car won’t have a resale value to speak of, nor will any other 2015 midsize SUV with any type of engine. It’ll either run well or it won’t. I’ll either keep it or move on.

Lex Tdi said:

In the right situation it very much is about ROI. In my family business I'm a sales manager, and am reimbursed per mile on where i go (this is true and common for a lot of businesses, rural postal carriers, etc...). If i can keep my cost low and underneath the cost per mile of reimbursement then you are generating income. So your vehicle becomes the vehicle to create a ROI. Same thing is true for our fleet of delivery trucks, what is the payback rate, and once you hit that number anything additional is extra on the revenue producing side.

My wife works for a university and can take a state car or be reimbursed .53 per mile if they take their own! That's way more generous than our reimbursement rate. Again another example of making your car a revenue producing vehicle.

The 2013 i bought used + fuel, insurance, & repairs - reimbursement from VW & Bosch has already generated a lower cost per mile than my old MKIV did. I plan on going as long as possible with this car and generating additional income with it.

Most people dont look at cars that way but some need to...

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What you're talking about is a totally different subject matter than what was said originally. Of course if you were reimbursed $1.00/mile by your employer and your operating cost was only $0.40/mile, you're making money on that. That's not rocket science.

But to talk about a car delivering ROI in the same way as an investment portfolio or rental property delivers ROI is preposterous.

And yes, most people don't look at it that way, and it's for a very good reason they don't.

DieselMann99 said:

What you're talking about is a totally different subject matter than what was said originally. Of course if you were reimbursed $1.00/mile by your employer and your operating cost was only $0.40/mile, you're making money on that. That's not rocket science.

But to talk about a car delivering ROI in the same way as an investment portfolio or rental property delivers ROI is preposterous.

And yes, most people don't look at it that way, and it's for a very good reason they don't.

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I lucked into a modest but appreciated ROI on a 5-Series that I bought new in Switzerland, drove for over two years, then sold and because the Swiss Franc appreciated so much against the dollar over that period I got several hundred more USD than the car initially cost me. And then there are those TDI flips, so don't try to tell us we can't generate ROI on a car, we know better!