If you sell the car back ( buyback ) you will have 4200$ roughly in cash money, No loan, to buy a replacement.
You could shop around for a used car or truck for 4200$ price range.
You could shop around for a more expensive used car or truck and put your 4200$ and take on a payment for the balance.
You could take the 4200$ and use that as a downpayment on a new car or truck.
OR..... you could keep the car and do nothing ( because of the deletes, and because its unlikely they will have a fix for 2010 model tdis, the " Fix " option probably won't apply or happen for you )
Your currently paying 240$ a month in payments. That means you borrowed roughly 12 to 13 grand. So to keep at 240$ a month you would put your 4200$ down and be financing a loan for 12 to 13 grand, which with your down payment would be a total out the door cost of 16 thousand to 18 thousand dollars ( depending on the interest rate you get, and state sales tax etc.... ) So at 16 to 18 grand, you won't find much new other than real basic cars. Possibly a Toyota Corolla or a Honda Fit, or maybe some type of domestic such as a Chevy Sonic or Ford Focus. Maybe something is on super clearance sale and you can find something semi nice, new, in that price range......... Some have said their VW dealer has had sweet pricing on some Jettas, you might could get a gas jetta for that price point... Of course alot of people don't want another VW after this whole mess we been going through!
You will obviously have a pretty big market to pick from in the 16 to 18 grand price point when you look at used cars. For that price range you could pick from a slew of 2-4 year old cars with low miles on them. You could certainly find a car such as a 2015 Camry SE with under 30 thousand miles for that price point. You will find plenty of other cars in that price point, Mazda 3's, 6's, Ford Escapes, Ford Fusion, etc.... etc.... 2 or 3 year leases are still real popular, and there is always a large market of 2-3 year old, Nice cars with 15-30 thousand miles on them, in the 15-20 grand price range.
Of course if you want to go higher than a 240$ a month payment you can just so up on the price of the vehicle. Unless you have BAD credit, you can count on roughly 17-20$ per month in payment for every 1000$ you borrow. So to stay at 240$ a month your borrowing 12 to 14 grand. Combined with your 4200$ your at 16,200$ to 18,200$. If you decided you wanted a new or used car that will cost 24 grand out the door... you would need another 5800-7800.... or more importantly, your payment would go up from as little as 100$ a month ( for another 6 grand at nearly zero percent interest ) to as much as 160$ a month ( for another 8 grand at a average 7-8 percent interest rate ) So in effect to go from a 16-18 grand new or used car, to a 24 grand new or used car you would go from a 240$ a month payment to a 340-400$ payment depending on your credit and interest rates.
You also have the option of a less expensive used car, that would still result in a payment but a lower payment than the 240$.... so as example, instead of a 16-18 grand car, you pick a 12 to 14 grand car. In that case your looking at as little as a 140$ a month payment to as much as a 200$ a month payment. You can still get a great low miles used 3-4 year old car for 12 to 14 grand.
Another option you have is to just take the 4200$ and go look for a used car you can buy for that 4200$. Then you have no payments. Now of course for 4200$ the car will not be both low miles and also only a few years old. You will have to decide if mileage or age is more important and also have to decide if you want a more simple basic car ( that will have less risk of mechanical issues and cheaper repairs ) or a more complex more luxurious type of car. With some careful looking around you can find some decent cars for 4200$. Nothing super fancy, but a solid car that would get you from point A to B and you would not have a payment. I will list some links to examples from my local market....
https://charlotte.craigslist.org/cto/5949144243.html
https://charlotte.craigslist.org/cto/5946025306.html
https://charlotte.craigslist.org/cto/5911027892.html
https://charlotte.craigslist.org/cto/5949114288.html
https://charlotte.craigslist.org/cto/5942420698.html
https://charlotte.craigslist.org/cto/5949164525.html
https://charlotte.craigslist.org/cto/5949203357.html
https://charlotte.craigslist.org/cto/5948829437.html
I could spend hours looking at all the used cars in that price point. Some gems out there to be discovered, and of course plenty of cars you probably should avoid. But there ARE decent cars out there that you could get several years of driving out of with minimal expense. Some good deals out there on cars with salvage titles too... At least around here there are. For a 3-4 grand car, who cares if it has a rebuilt title, so as long as its is mechanically solid and looks decent. Can get alot nicer and newer car for the same money.
If you chose to go for the 4200$ cash used car option, just think about this. You can put your 240$ each month into savings, and after say 3 years you would have 8640$ saved up. You could sell whatever you buy now for say 2 grand, then take that with your savings and you could buy another used car for 10600$ and still not have a payment. No money wasted on interest fees.
Youll have to decide whats best for you. Good luck