If we take the settlement and trade in, we really don't have the money for payments (bought 1st house in Toronto last year. 2 kids in childcare)
So in all honesty, I'd love to take the settlement and put it back into our family (house)
But I'm concerned about the recall. After they "fix" the problem, will it be the same car? Will the engine still be as long lasting? Will performance? Mileage?
I feel like I'm being asked to gamble when I really just want the car I paid for.
I don't think it will be the same car, as mine already isn't after the last couple rounds of firmware updates. But, my concern over the 'fix' aside from degraded performance and worse fuel economy, was longevity and maintenance. It's a mess I just don't want to be stuck with.
Regarding buy-out/trade-in, etc. if it's finances you're primarily concerned with, I'd just take the buy-out and then buy a nice used car. Aside from the joy of owning a car from day 1, you never come out financially buying new, IMO.
Just buy a few year old car that's been maintained (and most are at that point), or an older one with one-owner (if possible) that took good care of it and did all the maintenance (or even over-did it... like more frequent oil changes, coolant flushes, etc.).
The trick is finding something comparable you're happy with from a driving/performance/practicality perspective. But, keep in mind that VW cheated, so what was almost an unbelievable combo.... well, shouldn't have been believed.
If you're not a car person, or car family, you might be really happy with a good number of fairly reliable cars that should last a long time if well cared for. For us, I just picked up a BMW 328xi, one-owner, really well cared for, for less than half our settlement amount. While it does use more fuel, it's AWD, quicker and more fun to drive, and feels/looks like a new car. (Not sure if you'd be comfortable with the maintenance there... but just saying there are options.)