Gen II 3.0 speculation(s).

[psd1]

With the supply of Gen I 3.0 cars drying up (near dead), I am curious if any other Diesel-gate buyers are speculating on Gen II cars and what are you looking for if you are?

Here are my thoughts on Gen II speculation, what say you?

1. I think speculating on Gen II vehicles is a semi safe bet, especially now that by using the VW website a buyer can confirm how much repair money is available. I have purchased two Gen II's in the last three weeks with full fix money on them, I'm astounded that people are selling/trading them in with $10-$14K sitting on them, especially when the repair money is so easy to claim. THis leads me to believe that people who buy $60K+ cars dont really care about a few thousand...

2. The repair money is a lock, if it hasn't already been claimed the only person that can get the $ is the person who holds the title. I am specifically looking for low mile cars with all VW money on them.

3. I am targeting cars that have the highest buyback money on them. Cars a guy can buy for Mid $40K that have a buyback amount from $65-$80K+

4. I think the 2 PC subgroup will be the most difficult challenge for VW, why? The 2 PC group includes cars that are rated at 38 MPG. This is an astounding feat in big cars such as the A7 and A8, especially considering they are AWD. Hell, the Passat was rated at 42 MPG, weighed less and was Frt drive only. My belief on this subgroup is bolstered by VW's decision to request the most amount of time to gain approval (12/20/17). This leads me to believe that VW needs the most time to get a fix approved and avoid $500 per month payments to owners.

Anyhow, just thought I would throw out some thoughts.

 

[Fourplay]

Speculating on Gen II cars en masse really only works if you have a dealer license. Most states (including mine) require a dealer license if you sell over X cars per year (I believe it's 5 here in GA).

Yes, the repair restitution makes it a semi safe bet, but you still have to sell the cars if a fix is found. And it's unlikely that you'll be able to sell the cars for what you paid for them.

Plus, you have to consider the holding costs of the cars - money is tied up that could otherwise be invested elsewhere, you must insure the vehicles, and you'll need to spend some amount of money to acquire a dealer license/retail location.

That said, we have a dozen Gen II cars and climbing, but again, we have a dealer license and it is very much feast or famine. If the buyback hits (pretty unlikely), we'll make hundreds of thousands of dollars. If not, we'll make a few grand per car, hardly enough when you consider the amount of effort that has gone into this.

 

[Motodude]

The other thing about the a7's and a8's are they hardly made any of those. I would bet they are putting all their time into a fix for the suv's since those are the largest number of vehicles. I mean how many a7's and a8's did they make total, couple hundred maybe. Nothing when compared to q'7s, touregs, and q5's. Lot less motivation to get those fixed.

 

[Motodude]

I have noticed there seem to be a lot less of all of them for sale lately. The closer we get to those dates without a fix announced, the faster they will go.

 

[psd1]

Speculating on Gen II cars en masse really only works if you have a dealer license. Most states (including mine) require a dealer license if you sell over X cars per year (I believe it's 5 here in GA).

Yes, the repair restitution makes it a semi safe bet, but you still have to sell the cars if a fix is found. And it's unlikely that you'll be able to sell the cars for what you paid for them.

Plus, you have to consider the holding costs of the cars - money is tied up that could otherwise be invested elsewhere, you must insure the vehicles, and you'll need to spend some amount of money to acquire a dealer license/retail location.

That said, we have a dozen Gen II cars and climbing, but again, we have a dealer license and it is very much feast or famine. If the buyback hits (pretty unlikely), we'll make hundreds of thousands of dollars. If not, we'll make a few grand per car, hardly enough when you consider the amount of effort that has gone into this.

Why do you think a fix will occur? Are you selling Gen II's or sitting on them? Are you claiming part of the fix money, or using that as a selling point? Are you basing purchases off of available VW money?

I can buy as many cars as I want without a dealers license, I believe that 5 is the number if I start to sell that triggers a license. Since the Gen I's will not be registered for use on the road, and VW is buying them back I don't think that will necessitate a license.

I can register 5 in my name, 5 in my wife's name and 5 in my fathers name...IF the Gen II's don't get bought back from VW before needing a license.

I bought one Gen II 14 Touareg Exec 10K under KBB retail, and it had $10K VW money on it, and only 21K miles. It's also a vehicle I would keep if it isnt bought back. And...it was in GA. Ha ha!

My strategy is to only buy cars with full VW money at KBB trade in +/- $1K with low miles. That puts a $40K car around 30K with fix, and I believe it should be sold fairly easily for $35K. Nothing wrong with $5K profit on $40K.

 

[psd1]

The other thing about the a7's and a8's are they hardly made any of those. I would bet they are putting all their time into a fix for the suv's since those are the largest number of vehicles. I mean how many a7's and a8's did they make total, couple hundred maybe. Nothing when compared to q'7s, touregs, and q5's. Lot less motivation to get those fixed.

The 2PC subgroup includes the A6, A7, A8, A8L and the Q5, all of which get much better MPG than vehicles in the other groups. Also, the purchase price of the A7, A8 and A8L make them very expensive to buy back, especially compared to a Touareg that maxes out around $64K MSRP.

 

[Motodude]

The 2PC subgroup includes the A6, A7, A8, A8L and the Q5, all of which get much better MPG than vehicles in the other groups. Also, the purchase price of the A7, A8 and A8L make them very expensive to buy back, especially compared to a Touareg that maxes out around $64K MSRP.

I got a 2014 a7 prestige s line w 54,000 miles for 32,000 otd. I checked and all the money is going to me so I will get $11,000 w the bosch money if there is a fix. Buyback is over $80,000.

 

[Fourplay]

Why do you think a fix will occur?

Read the minutes from the 3.0L settlement approval hearing. Even the plaintiff attorneys were saying that a fix is virtually guaranteed. VW is highly motivated to limit the financial damage from the Gen II cars.

Basically, VAG can re-tune the engine to massively lose power/torque everywhere except the very top of the rev band (as long as the peak power has a <5% loss, they are okay), which will allow them to keep MPG losses to a minimum. Further, they can just dump massive amounts of DEF into the exhaust to bring the cars into compliance, as there is no restriction on DEF usage.

On a less technical note, I think it's better to not get my hopes up and be pleasantly surprised.

Are you selling Gen II's or sitting on them? Are you claiming part of the fix money, or using that as a selling point? Are you basing purchases off of available VW money?

We are sitting on the cars until a decision is reached. If there is a fix, we will take the entire restitution payment and list the cars for sale with the extended warranty as an advertised perk.

We are basing purchases off full restitution payment and potential buyback amount.

I can buy as many cars as I want without a dealers license, I believe that 5 is the number if I start to sell that triggers a license.

An additional benefit of the dealer license is the avoidance of the hefty 7% title tax here in GA. That's between $2500 and $3000 per car in savings.

 

[psd1]

I got a 2014 a7 prestige s line w 54,000 miles for 32,000 otd. I checked and all the money is going to me so I will get $11,000 w the bosch money if there is a fix. Buyback is over $80,000.

Damn, that's a smoking deal!

 

[psd1]

Read the minutes from the 3.0L settlement approval hearing. Even the plaintiff attorneys were saying that a fix is virtually guaranteed. VW is highly motivated to limit the financial damage from the Gen II cars.

Basically, VAG can re-tune the engine to massively lose power/torque everywhere except the very top of the rev band (as long as the peak power has a <5% loss, they are okay), which will allow them to keep MPG losses to a minimum. Further, they can just dump massive amounts of DEF into the exhaust to bring the cars into compliance, as there is no restriction on DEF usage.

On a less technical note, I think it's better to not get my hopes up and be pleasantly surprised.



We are sitting on the cars until a decision is reached. If there is a fix, we will take the entire restitution payment and list the cars for sale with the extended warranty as an advertised perk.

We are basing purchases off full restitution payment and potential buyback amount.



An additional benefit of the dealer license is the avoidance of the hefty 7% title tax here in GA. That's between $2500 and $3000 per car in savings.

All good points, I live in a state that doesn't have a sales tax and registering even the most expensive car is $200.

 

[psd1]

I got a 2014 a7 prestige s line w 54,000 miles for 32,000 otd. I checked and all the money is going to me so I will get $11,000 w the bosch money if there is a fix. Buyback is over $80,000.

Want to sell it? I'll give you $36K. Was this at a dealership or Auction or what? $32K is stupid low...then add the additional $11K! DANG great hit!!!

 

[Fourplay]

Want to sell it? I'll give you $36K. Was this at a dealership or Auction or what? $32K is stupid low...then add the additional $11K! DANG great hit!!!

We got an A7 Prestige for $31k a couple weeks back. Gotta be quick!

The A6/7/8 Prestige trims (standard trim for A8) are such nice cars. I've been driving one around for a few months and will be totally spoiled when I have to go back my actual car. There's nothing quite like setting the seat fan to max, turning on a massage, setting the active cruise control/lane assist, and basically letting the car waft you down the road. Pretty awesome.

 

[psd1]

We got an A7 Prestige for $31k a couple weeks back. Gotta be quick!
The A6/7/8 Prestige trims (standard trim for A8) are such nice cars. I've been driving one around for a few months and will be totally spoiled when I have to go back my actual car.

Damn, I'm looking at one with 20K miles for $40K, maybe I should pass...

 

[flargabarg]

They can't just keep adding DEF to get the emissions down because eventually they will hit the catalyst capacity and start having ammonia slip. If they think they can fix it with the current hardware they probably have done the work to confirm that. More likely I think is that they will limit the transient conditions which are particularly tough by limiting part throttle response. Since the emissions test never needs full acceleration they can basically run two tunes, one for a light touch and another for heavy acceleration. The second one only has to be mostly compliant since it won't actually be part of the official test, it just has to not be dreadful in on-road testing.

 

[psd1]

We got an A7 Prestige for $31k a couple weeks back. Gotta be quick!

The A6/7/8 Prestige trims (standard trim for A8) are such nice cars. I've been driving one around for a few months and will be totally spoiled when I have to go back my actual car. There's nothing quite like setting the seat fan to max, turning on a massage, setting the active cruise control/lane assist, and basically letting the car waft you down the road. Pretty awesome.

Since you are in the business, how do you get a value for a 2016 with the TDI, No KBB or NADA that I have found. I looked for an A7 and a Touareg recently.

Do you buy strictly on auctions? Is there a special Auction value book?

 

[flargabarg]

http://www.cand.uscourts.gov/filelibrary/3113/3370-Joint-Status-Report-on-Implementation-of.pdf

The generation 2 fixes have all been submitted in a timely fashion. Now to see if they get approved.

 

[MBQ]

Why do they need to wait for so long to approve or disapprove it? Isn't a 45 day period was set?

 

[flargabarg]

They might need to check to see if Volkswagen lied on the fix. I know, they'd never do that, right?

 

[Fourplay]

Since you are in the business, how do you get a value for a 2016 with the TDI, No KBB or NADA that I have found. I looked for an A7 and a Touareg recently.
Do you buy strictly on auctions? Is there a special Auction value book?

Well, I've only been "in the business" for a few months. I only got a dealer license because I was sick of paying taxes on cars that I was selling back to VW.

We buy a mix of auction cars and cars listed on the usual websites. The nice thing is that once you buy Car A from Dealership X, you can usually tell them you are interested in TDIs and they will later call you about Cars B, C, and D and you get them for way cheaper than a consumer would, since they aren't having to retail them or send them to auction.

 

[jking11]

Thanks Flargabarg

http://www.cand.uscourts.gov/filelibrary/3113/3370-Joint-Status-Report-on-Implementation-of.pdf

The generation 2 fixes have all been submitted in a timely fashion. Now to see if they get approved.

I hadn't seen this update. It's going incredibly well, from the perspective of those in the courtroom vs. the forum! And it looks like by submitting your vehicle into the process, you are scored as 100% happy!

And the fixes for most cars have been submitted. I sure believe there is 0% chance that the fixes won't be accepted. For my 3.0L's, I do not have any expectation of a buy-back!

 

[psd1]

Well, I've only been "in the business" for a few months. I only got a dealer license because I was sick of paying taxes on cars that I was selling back to VW.
We buy a mix of auction cars and cars listed on the usual websites. The nice thing is that once you buy Car A from Dealership X, you can usually tell them you are interested in TDIs and they will later call you about Cars B, C, and D and you get them for way cheaper than a consumer would, since they aren't having to retail them or send them to auction.

Are you only dealing in the 3.0 or are you doing 2.0 as well?

 

[psd1]

http://www.cand.uscourts.gov/filelibrary/3113/3370-Joint-Status-Report-on-Implementation-of.pdf

The generation 2 fixes have all been submitted in a timely fashion. Now to see if they get approved.

Great read, thank you!

 

[TDIforDays]

I am not touching Gen 2 with a 10ft stick. I spoke to several VW/Audi dealers and they all say that fix will most likely be approved.

We are buying only Gen 1 3.0s and all 2.0s that we can get our hands on.

 

[nayr]

I bought my Gen2 3.0L to replace my Gen1 2.0L TDI, I just needed a bigger vehicle and this was a great time to buy heh.

 

[Fourplay]

Are you only dealing in the 3.0 or are you doing 2.0 as well?

We did about 25 Gen I 3.0L and 2.0L, but there are basically none available at this point and the margins on them are poor.

Put it this way - I can make $8k on a Gen II 3.0L and I get 75% of the cars I call about.

OR

I can make about $5k (on average) on a Gen I 3.0L/2.0L and I get <1% of the cars I call about.

It's a PITA to spend all day refreshing various car sale websites to dig up the Gen I 3.0L/2.0L cars, find one, call, and be told that "Oh, that wasn't supposed to get in our system - it was a buyback".

 

[lvrpl]

We did about 25 Gen I 3.0L and 2.0L, but there are basically none available at this point and the margins on them are poor.
Put it this way - I can make $8k on a Gen II 3.0L and I get 75% of the cars I call about.
OR
I can make about $5k (on average) on a Gen I 3.0L/2.0L and I get <1% of the cars I call about.
It's a PITA to spend all day refreshing various car sale websites to dig up the Gen I 3.0L/2.0L cars, find one, call, and be told that "Oh, that wasn't supposed to get in our system - it was a buyback".

But what are your assumptions for the $8k you figure you'll make on a Gen II 3.0L, given that there isn't a guaranteed buyback on them at this point? Are you assuming you'll make $8k if the fix isn't approved and a buyback is offered? Are you figuring you can resale the car and make $8k after getting the restitution from the fix? Or something else?

 

[TDIsaver]

I am not touching Gen 2 with a 10ft stick. I spoke to several VW/Audi dealers and they all say that fix will most likely be approved.

horrible source of info. just horrible. But i tend to agree with you on this. I think the fix will be approved. But it's still a good bet if you can get them cheap enough.

We are buying only Gen 1 3.0s and all 2.0s that we can get our hands on.

Oh, really. You and everyone else that's paying attention. The problem is you can't get your hands on any!
Or at least, you need to be really lucky to even get a sniff of one at this point. (but this should not stop us from looking.... BTW, i got my highest profit car in late May 2017).

 

[drsven]

Correct me if I'm wrong - 50% of the restitution payment will be made available once a claim is approved and scheduled at dealership, with the remaining 50% paid out after the emissions fix is applied.

Since we're just speculating at this point, my guess is that many more vehicles will hit the market once the first round of payments are issued.

Hard to say what the future value trend will be on these vehicles if a fix is approved. At least to me, it always appeared to be a buyer's market before the buyback speculation started. We shall see.

 

[Fourplay]

But what are your assumptions for the $8k you figure you'll make on a Gen II 3.0L, given that there isn't a guaranteed buyback on them at this point? Are you assuming you'll make $8k if the fix isn't approved and a buyback is offered? Are you figuring you can resale the car and make $8k after getting the restitution from the fix? Or something else?

$8k repair restitution + $1500 Bosch money on every car is guaranteed. On top of that, we can get $4k in the next 2-3 weeks.

Figuring that the Bosch money will approximately offset the difference of what we paid vs what we can sell for.

As a dealer, the purchase price to sale price spread is much better than for a private individual, so buying and selling at the same price isn't out of the question. Plus, the cars will have an extended warranty, making them easier to market and sell.

 

[psd1]

We did about 25 Gen I 3.0L and 2.0L, but there are basically none available at this point and the margins on them are poor.
Put it this way - I can make $8k on a Gen II 3.0L and I get 75% of the cars I call about.
OR
I can make about $5k (on average) on a Gen I 3.0L/2.0L and I get <1% of the cars I call about.
It's a PITA to spend all day refreshing various car sale websites to dig up the Gen I 3.0L/2.0L cars, find one, call, and be told that "Oh, that wasn't supposed to get in our system - it was a buyback".

Very difficult to find any Gen I 3.0's these days. Called on a Treg Sport last week that was listed for $28K, when they realized what they had they took the top four bids. Buyback was at $45.5. I told them I would go $36, they said they had a guy at $43. So, unless that guy was local I dont see how it pencils.

I'm picking up a 2014 A7 tomorrow, salesman says he has been getting 10 calls a day on it. There are people out there paying attention.