I love my VW, but I'm taking the cash and ditching the car.
As part of Volkswagen's agreement Tuesday to pay nearly $15 billion to settle claims from its diesel emissions trickery, owners are given two options: Sell their faulty cars back to the company at pre-scandal value or get them fixed for free. I'm selling the car.
First, an admission: I am not a VW nut — nor am I much of a car guy. My wife and I bought our black 2010 Jetta SportWagen TDI based on how it looked and how much family we could pack in it (until this morning I didn't know TDI stood for "turbocharged direct injection," and I still don't know what that really means). We wanted a station wagon instead of an SUV — for both nostalgic reasons and a general distaste for trucks — and used-car lots aren't exactly spilling over with wagons these days. (Shockingly, nobody makes them anymore. Sigh.) That it had a diesel engine was coincidental. We Googled what that meant, too — good mileage, less damage to the environment. Bonus! We were getting our first car and going green.
We drove off the lot nearly four years ago, and we've had zero complaints. The plan was to drive this VW until it broke — even after the diesel scandal. But now, given the company's two options, we'd be crazy to keep it. According to the settlement, owners can elect to have Volkswagen buy back the car for a price reflecting the September 2015 value, right before the diesel story broke. For drivers taking the buyout, the company will also pay "additional compensation" of between $5,100 and nearly $10,000, depending on the vehicle. The combined payout for my 2010 model is $14,775 to $16,607, according to the agreement. I asked Phil LeBeau, CNBC's veteran auto and airline industry reporter, if this was a good deal: "Hard to say, but it's a hell of a lot better than most owners probably expected when this first came out."
Karl Brauer, senior analyst at Kelley Blue Book, thinks owners will also appreciate not "being forced down one pathway" by also having a second option, which is to wait to see if the EPA will approve an engine fix and then deciding whether to accept it. (This group will also receive the additional compensation of up to $10,000.) The modification, however, could reduce the engines' performance and gas mileage, experts say. One colleague and happy Golf GTI owner said he couldn't imagine what kind of "weird, cobbled-together plumbing" they'd have to use; he's also planning to sell.
It's unclear how many people will fix their VWs instead of selling them back. Volkswagen set aside more than $10 billion, but the actual cost will depend on how many owners take the buyback. Experts say owners with newer models are more likely to wait for a fix, while those with older ones will probably take the deal. I'm in the older camp, with a car that's seen its share of NYC dings, including a passenger-length gouge from scraping against the wall of a parking garage (my fault, sadly). I also have a second kid coming any day now, and our roomy SportWagen was already feeling tight with a second car seat. That makes the timing right to take the dough and shop for an SUV — and probably not a VW Tiguan.