VW emissions scandal pummels prices of used diesel cars

Prices for used Volkswagen diesel cars have hit the skids since an emissions scandal broke, but prices for gasoline-powered VWs appear to be relatively unscathed, according to auto industry sources.

Bob Rand of Pasadena is trying to sell his 2014 fully loaded diesel Volkswagen Passat. The prices on used models has fallen. Photo: Chris Carlson, Associated Press

On Sept. 18, the U.S. Environmental Protection Agency and California Air Resources Board notified Volkswagen that certain of its 2.0-liter 4-cylinder TDI diesel vehicles did not comply with clean-air standards. Volkswagen has admitted that it tampered with those cars to pass emissions testing.

The average auction price for those VW models has dropped nearly $2,100, or 16.1 percent, since the announcement, according to Kelley Blue Book.

During the same period, the average price of used gasoline-powered VWs fell about $500 or 4.4 percent. That drop is roughly in line with all used-car values, which slipped $600, or 6 percent, over the same period. “The takeaway point is that the used market for the gas-powered VW models has not been affected by the scandal so far,” KBB spokeswoman Joanna Pinkham said.

KBB.com, a go-to site for used car values, has not updated its values for the cheating diesels to reflect the sharp drop in auction prices.

“We are taking more of a wait-and-see approach to see what VW is going to do to fix these cars, how it will affect fuel economy and performance. We don’t want to base it on what has happened” at dealer auctions, said Tim Fleming, a Kelley Blue Book analyst. “It’s an artificial market right now for these cars, it’s changing every week. You have people trying to buy low, people trying to get rid of their inventory.”

In a slightly different study, Edmunds analyzed auction data for all VW diesel models from Aug. 3 to Oct. 30. It found that the average price in the weeks before the Sept. 18 announcement was $12,887 and the average price after was $11,780, a drop of 8.6 percent.

By comparison, the average auction price for used non-diesel VWs over the same period fell only 5.2 percent — to $10,481 from $11,059. “Seasonality would typically account for a 3.6 percent drop during this period, so the extra 1.6 percent may or may not be related to the crisis,” Edmunds spokesman Aaron Lewis said.

Edmunds is still advising owners of the tainted cars to hold onto them until VW comes out with a fix or buy-back plan. And that’s what most owners appear to be doing.

 

Zandy Hartig of Studio City has a 2013 Volkswagen Jetta Sportwagen diesel. Photo: Chris Carlson, Associated Press

Photo: Chris Carlson, Associated Press

Zandy Hartig of Studio City has a 2013 Volkswagen Jetta Sportwagen diesel.

Calvin Walters, owner of an Audi A3 TDI that was also implicated in September, has not tried to look up its value. “We are stuck between too frustrated and too mad to try,” he said. “Thank goodness we don’t need to sell.”

Peninsula resident David Jones is also standing pat. “It’s partly that I still find the car one of the best I’ve ever owned,” he said. “My Jetta Sportwagen is one of the best blends of utility, economy, comfort and fun I’ve ever run across. I’m planning on waiting to find out what the fix will be.”

Volkswagen dealers are not allowed to sell new versions of cars subject to recall, so it’s impossible to say how their prices will be affected. Dealers can accept the tainted used cars as trade-ins and resell them, but they cannot sell them as certified preowned cars.

In early November, the EPA said that VW had also installed software to defeat emissions testing on certain 6-cylinder diesel VW, Porsche and Audi models.

Volkswagen has until Nov. 20 to give the California Air Resources Board its plans for a fix and a recall. Once it is received, the board and the EPA will have to evaluate it. “I’m not sure how much there will really be to say at that point, but that’s their deadline,” said David Clegern, a spokesman for the air resources board.

It’s hard to say how the scandal is impacting the price of new gas-powered VWs.

Kelley Blue Book looked at new-car transaction prices for several gas-powered VW models for the 12 months ended Oct. 1, and the results were mixed. The average price was up 1.6 percent for the Beetle, down 1.6 percent for the Golf, up 5 percent for the Jetta and down 6.1 percent for the Passat. “I should point out that October sales were down a lot for the Jetta and up a lot for the Passat,” Pinkham said.

[“source-sfchronicle”]