Volkswagen's Gift Card Offer Enrages Some, Sparks Demands For Buy-Backs

November 11, 2015

Earlier this week, Volkswagen announced a new, "we're sorry" gift card offer to appease owners of its 2.0-liter diesel cars. While some customers seem okay with the program, others are clearly appalled and have begun insisting that Volkswagen buy back their not-so-clean diesels.

The offer provides owners two gift cards: one is a prepaid Visa card worth $500 that can be used anywhere, the other is a $500 gift card that can be used at "any participating Volkswagen dealership" (which implies that some dealerships have snubbed the program). Volkswagen is also offering three years of free roadside assistance. 

That adds up to a value of around $1,200. However, considering the sticker price of the vehicles affected by the scandal -- not to mention the loss of resale value in cars tainted by Dieselgate -- $1,200 could seem like fairly cold comfort.

And that's how many owners are viewing it. Brenda Andrews owns a Jetta TDI and feels clearly betrayed: "I kept telling myself that the emissions and clean diesel and excellent miles per gallon made up for the rough ride and loud road noise."

Danny Lori, who owns an Audi A3 TDI (one of the only non-VW models equipped with a 2.0-liter diesel engine), puts it more strongly: "They should HAVE to take my car back and return my money. It's outrageous."

So far, however, buy-backs don't appear up for discussion. If all 482,000 U.S. vehicle owners affected by the scandal were to accept Volkswagen's gift cards, the company would shell out more than $570 million in cash, incentives, and services. That's not exactly chump change, even for an international corporation like Volkswagen.

But buying back those vehicles would push that sum well over $12 billion -- and of course, that wouldn't begin to cover the more than 10.5 billion Volkswagen models in other countries, or the recently red-flagged 3.0-liters.

OUR TAKE

Based on previous auto scandals -- including last year's Switchgate fiasco at General Motors and the ongoing Takata airbag recall affecting a dozen car companies in the U.S. -- it's unlikely that Volkswagen will be required to buy back its flawed diesel vehicles. Though repairing them won't be cheap, easy, or quick, doing so will likely appease the Environmental Protection Agency and the National Highway Traffic Safety Administration. 

That's not to say that the Federal Trade Commission won't complain when Volkswagen's fix puts a dent in the fuel economy that buyers were promised. Nor is it to say that there won't be class-action lawsuits. In fact, there will probably be dozens. And we're most definitely not implying that this is the end of the offerings. We'd be sorely surprised if Volkswagen didn't sweeten the pot a bit more down the line.

But buy-backs? Probably not.

The bigger question, the one that really deserves an answer, is: "What will this do to diesel sales in the future?"

We have a few hunches. How about you?

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