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Volkswagen Diesels: Buy, sell, or hold?

Everyone who owns or has remotely considered a Volkswagen diesel over the past 45 days has tried to figure out the right formula. Is it worth buying after the recall? If I own one, should I sell it? How will it perform if I want to keep it? Questions create doubts, and doubts create a stunning lack of activity when it comes to the new and used car market. I seriously doubt Volkswagen will be rolling out its 2016 TDI models anytime soon. The company already failed to create a fix nearly a year ago and has spent an unusually long amount of time trying to get the formula right. There's also the fact that it rescinded its EPA application for 2016 models. I can't provide the ultimate oracle's guide on whether any recalled Volkswagen diesel will fall under the "good value" perceptions of car buyers. But I do believe four factors in particular will be largely independent of the outcome of that recall, and they're what you should pay particular attention to if you plan on buying any Volkswagen diesel – new or used. 1. Demand Creating Bad Supply There are a large number of car buyers who believe that they can zig while the marketplace tells them to zag. Unfortunately, those are the ones that get sent to the slaughter once articles like the one linked above proclaim, "resale values are down 13 percent." These heavily biased write-ups ignore the fact both the supply and demand of new and used recalled Volkswagen diesels are no longer operating in that free market. The supply side is obvious since the EPA has put a stop-sale on all Volkswagen diesels. However, on the demand side, those Volkswagen dealers who have exclusive access to off-lease vehicles and certified pre-owned programs for 2012 and newer VW diesels are now sitting on the sidelines with all those cars. When your best players no longer play, consumers don't come to the ballpark. What exists right now is a lot like a professional sports strike where the talent sits out until a collective agreement is reached. When your best players no longer play, consumers don't come to the ballpark. The marketplace only offers scabs that can play an inferior game. In the wholesale car business, the scabs are salvage vehicles that are wrecked or flood damaged, vehicles that can't be put under a CPO program due to frame damage and lemon law requirements, and the wholesale repossession market. All of these substandard vehicles make up the new supply, the collective underbelly of low-end quality in the used car marketplace.

Angry diesel owners joining lawsuits against Volkswagen [w/video]

Livid at the prospect of losing thousands of dollars from the value of their cars and performance from their diesel engines, many owners of Volkswagens are headed to court. A law firm with a track record of suing automakers has already filed three class-action lawsuits against the German automaker related to its emissions-cheating scandal and says a fourth one is on the way. The lawsuits, filed by national firm Hagens Berman, accuse Volkswagen Group of America of fraudulent concealment, false advertising, and violations of federal and state laws. Plaintiffs in all 50 states have joined the class-action suits, according to the firm. A spokesperson says there has been "an unprecedented response" since the first lawsuit was filed within hours of an announcement from federal regulators last Friday. The lawsuits accuse Volkswagen Group of America of fraudulent concealment, false advertising, and violations of federal and state laws. Diesel owners paid thousands more for their vehicles instead of their gasoline-powered counterparts because Volkswagen's diesel engines ostensibly offered both torque and fuel economy. Now affected car owners are faced with a double-whammy – the value of their cars has diminished with the news and the purported software fix that brings the cars in emissions compliance will likely lower their performance and gas mileage. "Hundreds of thousands of consumers put their trust in VW when they looked to its 'Clean Diesel' line for an efficient, environmentally conscious diesel option," said Steve Berman, managing partner. "But for years, VW cheated the system. Its TDI line of fast but 'good-for-the-environment' cars seemed too good to be true, and they were." In its latest court filing, Hagens Berman lawyers said that car owners believed their vehicles were in compliance with Environmental Protection Agency standards and that the cars would retain their operating characteristics throughout their useful lives. Another firm, Girard Gibbs, has also filed a lawsuit over the diesel deception. "These Volkswagen vehicles should never have been sold, and certainly should not have spent the past six years on American roads polluting our air," said Eric Gibbs, the lead attorney. "Not only does this kind of fraud harm consumers and the environment, it negatively impacts competition, which is what drives our free-market system.

Car companies may need to start curbing model proliferation

Looking at the current automotive landscape, especially from German makers, you quickly get the impression that less definitely isn't more. BMW alone offers its 3 Series platform in practically every segment possible, including the regular sedan and 4 Series Gran Coupe, which would seem to be direct competitors. Porsche might be the winner, though, with 20 different variants of the 911 listed for sale on its US website. However, some of this model madness might be reaching an end as companies begin cutting back spending or shifting money to other priorities.
According to Yahoo Finance, the offerings from the German automakers are up 25 percent over the past three years to over 200 models in Europe. The peak is expected to come around 2018 at 230 separate vehicles, according to consulting company PwC.
Amazingly, BMW, which is among the poster children for this model explosion, might be changing its tune. "I'm sure there will be points in the future where we look at certain cars and say, 'Maybe we need to think differently now,'" said head of sales Ian Robertson in an interview, according to Yahoo Finance. The statement certainly sounds shocking coming from a company rumored to have 23 front-wheel-drive vehicles all using a single platform on the way.