Volkswagen Dealers, Vehicle Prices Taking Damage

Volkswagen badge (Credit: Volkswagen)

As we reported recently, Volkswagen saw a big drop in sales for the month of November, triggering quite a few concerns about the future of the company in the short term. Now, new data is showing that the automaker’s vehicle prices and dealers are taking a beating, with no sign of things improving anytime soon.

According to a new report from Autolist, it’s not just VW’s TDI models that are seeing a drop in value. While the vehicles involved in Dieselgate are sitting on lots 47 percent longer than the industry average, their gasoline-powered counterparts are seeing a 9 percent longer sitting time.

Autolist Dieselgate infographic (Credit: Autolist)

While many are saying the trouble caused by Dieselgate means it’s a great time to buy a Volkswagen, especially a TDI, it’s important to note that the slide in values doesn’t look like it’s even close to over. So far, Volkswagen’s “scandal” vehicles’ value has dipped 5 percent, while its other models have taken a 2 percent hit. That might not seem like much, but 5 percent of a $25,000 car is $1,250. Over the course of a five- or six-year long that amount of money can make a sizable difference.

Autolist also found that the rate of depreciation for Volkswagen vehicles is shockingly quick. In just two months, the average value lost was $1,500.

All of this means that buying a Volkswagen at this point is definitely a gamble. It’s conceivable that values could continue to slide, maybe even at a faster rate with the whole Dieselgate scandal getting uglier all the time. There’s talk of potential Congressional action coming in the United States soon, which would almost definitely push values down dramatically. Exactly how Volkswagen will go about recalling and fixing its TDI models will also have an effect.

Analysts at Autolist feel that the next 1 to 3 months are extremely critical since whatever happens during that period of time could indicate if Volkswagen will pull out of this slump, or things will get much worse. In other words, if you’ve been weighing buying a Golf, Jetta, etc. now might not be the best time to go through with it.