At Shaus Motorsport in Aurora, we are Denver’s German auto repair professionals. There’s been some confusion lately regarding the VW emissions problem, so we want to explain why the VW diesel buyback pays owners to keep their cars for two more years.
Volkswagen plans to make buyback offers later this year. The buybacks will be available to more than 450,000 owners of Volkswagen and Audi sedans, wagons, and hatchbacks with 2.0-liter TDI diesel engines. This is for model years 2009 through 2015.
Many owners plan to take the buyout, but financially, it might be better to wait until the last possible moment to accept the buyback.
So when Volkswagen rolls out its anticipated offer to either correct the TDI emissions problem or buy back the car, many people already know what they want to do. Many plan to take the buyback as soon as they can. But all TDI owners should consider an interesting financial component in Volkswagen’s settlement with the EPA, CARB, and class-action attorneys.
Under the settlement, Volkswagen must buy or fix the affected TDIs by the end of 2018. According to a Green Car Reports article, this gives owners a two-year window of opportunity to end up with more money out of the deal.
Here’s how it works.
At year-end 2016, let’s say a 2012 TDI has accumulated 110,000 miles and a 2015 TDI has 30,000 miles. Under the settlement agreement, Volkswagen would buy back the 2012 TDI for a total of $18,287 and the 2015 TDI for $22,776.
But what would it look like for a buyback two years later at the end of 2018?
At that time the 2012 TDIs odometer has 154,000 miles and the 2015 shows 74,000 miles. At the end of 2018, Volkswagen would then buy back the 2012 for $17,417 and the 2015 for $21,636.
Although the 2018 buyback would pay $870 less for the 2012 TDI and $1,140 less for the 2015 TDI than the 2016 buyback, they would each be two years older and have 44,000 more miles on the cars.
Green Car Reports estimates that the cost of waiting two years to take the buyout would be $36.25 a month for the 2012, and $47.50 a month for the 2015.
This means it would benefit the owners to hold on to and drive their TDIs until the last possible moment and then take the buyback, because the buyback amount is frozen at the car’s clean trade-in value as of September 2015. It does not decrease with either time or miles unless mileage exceeds 12,500 per year.
Yes, you will still have to pay the interest, insurance, maintenance, and fuel, but you would have to pay those on a replacement vehicle, too.
This explains why the VW diesel buyback pays owners to keep their cars for two more years. As Denver’s German auto repair professionals, Shaus Motorsport in Aurora will not only provide professional repairs and maintenance but all the important news you need to know about your German vehicles. We’ll let you know if we hear any further updates about the VW buyback. Stay tuned.