With the summer road trip season upon us, it seemed timely to bring up a car topic that has moved out of the spotlight: The Volkswagen TDI Settlement. Initially, it seemed like writing about this would be pretty straightforward, but within the buyback experience, a larger issue was exposed: VW allowing opportunists to exploit the settlement process.

The Settlement Process, First-hand Experience

The buyback process was quick and easy. The agent who did our closing, Mark, I had met previously. Though professional, on initial interaction, his job appeared unpredictable and stressful. Mark seemed nervous, hands shaking and out of sorts. As it turns out, the buyback role requires the agent to constantly drive between VW and Audi dealerships in the region, for closings with individuals who select their local dealership, resulting in an inconsistent base of operations. Plus, the demeanor of the sell-back individual is unpredictable. Some are still confused and stressed by the process when there is a loan closing involved, and others feel they are cheated and want to be heard. My impression from speaking with him is that “Don’t kill the messenger”, has not been observed by sellers.

Our buyback experience wrapped up quickly: we went out and demonstrated the vehicle turned on and could drive backward and forward 10 feet, then we were handed over a check. The reason for us selecting the buyback instead of emissions fix was described previously.

TDI Settlement outlines a 6 step claims process — Although VWGoA Outlines a 6 Step process, the sub-step questions and requirements put the process at closer to two dozen.

The Volkswagen & Audi brands, which I will collectively reference VWGoA (Volkswagen Group of America), documentation process, that preceded the buyback, was extensive. It was 19 steps, providing various paperwork, declarations, and scheduling.

After wrapping up our quick buyback meeting, I inquired to the VWGoA agent how the process is going overall. He mentioned that Volkswagen dealers recently began accepting the buyback checks as a trade-in, which was a good deal for customer retention, as it eliminated some sales tax. The process remained anxiety-inducing for some claimants who have a loan on their vehicle.

The Dark Side

It was freely shared that individuals are taking advantage of the system. One story particularly bothered the VWGoA agent:

Two brothers unabashadely took $10k out of their 401(k) to fund the purchase of salvaged TDI’s that are in the qualifying age of vehicles for the buyback. In January the brothers showed up to a buyback appointment with 3 Audi TDI on a flatbed. Each one turned on, which at the time was the only requirement for qualifying a vehicle as being operational, and that day they walked away with a check for $140,000. The VWGoA agent refused to sign off on this buyback because the vehicles had salvaged titles, which are explicitly excluded, per the Terms of the Class Action Settlement.

The TDI Settlement has many requirements to qualify for Buyback or Restitution — Salvaged Titles are Excluded from the TDI Settlement. The exclusion is clear.

Stepping in for the buyback agent’s objection, VWGoA Corporate indicated they would accept the vehicles, and also informed him these two guys have 37 more vehicles they are selling back. Rough buyback estimate, $1.2 million!

So Many Questions…

This is where my thoughts and speculation began!

My Question: Why would Volkswagen accept these, as they clearly exclude salvaged vehicles in the Buyback Terms & Conditions?

My Guess: There is a bounty and this adds to the headcount. VWGoA needs to remove or modify 85% of the affected vehicles, per the EPA website:

Volkswagen must remove from commerce in the United States or perform an approved emissions modification on at least 85 percent of the affected 2.0 liter vehicles by June 2019.

A salvaged vehicle has no visibility of being removed from the road, with respect to VW proving to the EPA they are indeed removed. Sure, they could scan all vehicle registrations in every state and count the number of TDI that are no longer registered and cross-reference those that are claimed for buyback or modification. That would be an expensive undertaking for VW. The states have no reason to do that VIN registration search for free, particularly on behalf of an offending corporation, and a car no longer being registered does not prove it is any longer being driven, which is the whole point, removing these vehicles from the road [or modifying them] to eliminate the excess emissions.

This was a passing discussion with the VWGoA agent during our buyback process and it caught me off guard. I imagine someone could investigate this further and validate if people are taking advantage of the buyback, or found some loophole despite the vehicles not passing the clean title. It is also surprising if this story is true, of a VW owner stripping down their Golf before turning it in, and being denied. After Volkswagen’s poor conduct resulting in the TDI scandal, it seems they would want to stay clear of any transactions which are in conflict with the Terms of the Class Action Settlement. If they are accepting salvaged vehicles as buybacks, to ensure they reach the 85% threshold, such a move would be customer-centric, but again is lacking in transparency, which does not build customer confidence.

https://www.epa.gov/enforcement/volkswagen-clean-air-act-civil-settlement

That New Car Smell

The car was great, we figured we were saving 500 gallons in fuel a year, road trips with four adults, two big dogs, and a roof rack car carrier gave us all the space of renting an SUV, but double the gas mileage! At the time I had calculated the breakeven for the diesel over the gas variant was roughly 60,000 miles, which seemed like no problem because our last car had been driven to 150,000. Our actual recovery point was probably less because we had an exceptional period of time in Ohio where diesel cost less than 87 octane, this is a common occurrence down south, but not in the northern states along the turnpike.

I espoused the value of the diesel passenger car to friends and coworkers, how it was a better return on investment than hybrids in the same vehicle class. In retrospect, I had become a diesel evangelist. On a trip to Europe, I saw the TDI everywhere, much more prevalent than what we had in the states, and noted the disparity to our gas guzzling culture. Thereafter, indirectly or not, one coworker bought an American made Passat TDI while another got a BMW 535d.

The VW Diesel Crisis

The VW Clean Diesel Documentation in its Emissions Spewing Irony

The Clean Diesel’s Emission Spewing Irony

That same coworker, the 535d owner, texted me the TDI news in fall 2015. A major lawsuit was coming because Volkswagen lied about the emissions on their diesel vehicles. I blew it off, these were the Clean Diesel people, they had a better mousetrap than the competition. WRONG. And a few weeks later VW admitted it, they had created a cheat system in the vehicle system to cheat the emissions testing procedure. Many have chronicled the events as they unfolded, including this timeline from cars.com.

The excess emissions notwithstanding, we still liked our car, it was not even five years old and we planned to keep it for ten, so we had no plans to get rid of it. As the months unfolded, plenty of stories came out about people driving their cars to VW America HQ and making a public scene of the companies indiscretion. I was not in that group. The car still served all the purposes we had, albeit a bit more cramped with a car seat. Then the “I’m sorry” gift cards came, with extended roadside assistance warranty. We used the gift cards to get winter wheels for the car, in effect, doubling down our commitment to the car, and canceled our third party roadside assistance. This is awesome! We are coming out ahead. Then the Buyback plan came out. Receiving more than Kelley Blue Book value for the car seemed attractive, but considering that the average car price was roughly 15% more than what we paid for the JSW, the net outcome seemed less appealing. So we held tight.

Subliminal Message: Please Don’t Leave Us!

But something changed. Maybe the Buyback idea grew on me. Maybe my beliefs of the car had been so high and now reality set in, I was underwhelmed. It reminded me of watching The Wire. After an eccentric sexagenarian told me “You hafta watch The Wire,” we used our Netflix disc rental to the fullest and consumed all five seasons over the course of a few months. When the show was over I had a TV hangover. I had no interest in watching another show. I felt nothing else would measure up. And now, looking at our car, that is how I felt about the JSW, it would never live up to its marketing persona.

And so, we flipped. The TDI Clean Diesel had fallen from the exalted position of the perfect car for us to being a short-timer that would soon be out the door. Now, what will replace it? Looking at cars, wagons, CUVs and SUVs, the gas, hybrid and electric variants, nothing measured up to the fuel economy standard we had become accustomed to in the JSW…because it was all a lie!

As of today, our 2011 Volkswagen Jetta SportWagen TDI has been bought-back by Volkswagen Group of America. With the distorted measuring stick that was the TDI-family and finding no vehicle to which I feel I can make a long-term commitment, the buyback is going into a lease on an all wheel drive, tech-laden sedan. Heated and vented seats, car play, remote start, multiview cameras, an app..yes, please! The Spartan family truckster had nothing on this.

Category: Autos

TDI Buyback: Abusing the Class Action Settlement?

The Settlement Process, First-hand Experience

The Dark Side

So Many Questions…

Goodbye, TDI ‘Clean Diesel’

That New Car Smell

The VW Diesel Crisis