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I don't think it's clear that they would win. The cars will be reprogrammed to meet EPA rules, and then they will have less power and use more fuel. The will

I don't think it's clear that they would win. The cars will be reprogrammed to meet EPA rules, and then they will have less power and use more fuel. The will be worth X on the resale market. Two weeks ago they were worth Y, where X < Y. The damages owners might be entitled to are probably Y-X, not Y.

jonknee 11y ago
They should clearly win because they were sold a fraudulent product. If I sold you a gold watch that didn't turn out to be gold I don't just owe you the difference, I owe you back all the money and I go to jail. The good news for VW is that the cars aren't worthless, so they can buy them back and sell them. For people who want to keep their car there will probably also be a cash offer.
- thrownaway2424 11y ago
  Yeah, but it's going to be a mess. The person who sold you the car, at the VW dealership, unknowingly misrepresented the product to you. As a consumer under US law you are entitled to certain remedies (such as: the retailer has to take the product back). Then the dealer, who is not, under US law, a "consumer" and is also not identical to Volkswagen itself, has to seek relief from VW for providing it with the bogus merchandise in the first place. But in practice you're not going to be able to walk into the VW dealer and demand your money back, you'd have to take them to court, and there will probably be strong arguments on their side that the case is preempted by some other, much larger suit.
  - jonknee 11y ago
    It will definitely be a mess. There are already class action suits in progress and I'm sure many more on the way. There is some precedent for buybacks and they typically take depreciation into account, though this is a whole other level of scandal so the rules may be different. Fiat Chrysler recently announced a buyback as part of a consent decree with the NHTSA: http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back-recalls-heres-what-you-need-know-n401046 http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back... > As to how much money an owner might receive under the buy-back program, the consent order stated that FCA must "refund the purchase price paid by the first purchaser of the vehicle for purposes other than resale, less a reasonable allowance for depreciation, and not including the cost of modifications made to the vehicle after the first retail sale." To sweeten the deal, a 10 percent premium will be factored into the initial purchase price. Not a bad deal actually and this was defect based, not fraud based. I think VW would be incredibly lucky to have such a settlement.
tantalor 11y ago
If the warranty/purchase agreement indemnifies the manufacturer against lost value, then they won't pay anything. Did you read the whole contract?
- thrownaway2424 11y ago
  The law (in the USA, and many of its states, at least) prescribes what can and cannot be disclaimed in a warranty.
- papercrane 11y ago
  Depends on the consumer protection laws of Germany, but I doubt that bit of the contract would hold up in court.
cptskippy 11y ago
I'm not sure there is a way to fix the cars without a hardware retrofit if that is even a viable option. Someone on reddit (https://www.reddit.com/r/business/comments/3ljng2/volkswagen_ordered_to_recall_500000_cars_after/cv6y2uo https://www.reddit.com/r/business/comments/3ljng2/volkswagen...) suggested the only way they were able to pass emissions was to keep the exhaust gas recirculator (EGR) operational during the test reducing NOx emissions. Keeping the EGR open has a lot of drawbacks and probably isn't a viable long term solution as it results in loss of power in the engine, reduced fuel economy, greater wear on the engine, increased particulate emissions, increased overall operating temperatures. The later drawback would probably require a hardware solution. A diesel engine with an EGR operating doesn't efficiently burn off all the fuel which, in addition to loss of power, produces greater particulate matter (pm) emissions which intern need to be filtered from the exhaust. The exhaust filters can become clogged with pm soot and the way it's cleansed is by injecting and igniting fuel in the exhaust to burn off the soot. If the EGR was continuously in operation then this burn off process would happen with greater regularity increasing the operating temperature of the exhaust system which would probably require more heat shielding and cooling. Another option is a selective catalytic reduction (SCR) system. Assuming one could be retro fit on these cars, an SCR would probably have the last impact on the vehicle's operation but would introduce new maintenance concerns for the operator (DEF fluid) and Volkswagen.

jonknee 11y ago

They should clearly win because they were sold a fraudulent product. If I sold you a gold watch that didn't turn out to be gold I don't just owe you the difference, I owe you back all the money and I go to jail. The good news for VW is that the cars aren't worthless, so they can buy them back and sell them. For people who want to keep their car there will probably also be a cash offer.

thrownaway2424 11y ago
Yeah, but it's going to be a mess. The person who sold you the car, at the VW dealership, unknowingly misrepresented the product to you. As a consumer under US law you are entitled to certain remedies (such as: the retailer has to take the product back). Then the dealer, who is not, under US law, a "consumer" and is also not identical to Volkswagen itself, has to seek relief from VW for providing it with the bogus merchandise in the first place. But in practice you're not going to be able to walk into the VW dealer and demand your money back, you'd have to take them to court, and there will probably be strong arguments on their side that the case is preempted by some other, much larger suit.
- jonknee 11y ago
  It will definitely be a mess. There are already class action suits in progress and I'm sure many more on the way. There is some precedent for buybacks and they typically take depreciation into account, though this is a whole other level of scandal so the rules may be different. Fiat Chrysler recently announced a buyback as part of a consent decree with the NHTSA: http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back-recalls-heres-what-you-need-know-n401046 http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back... > As to how much money an owner might receive under the buy-back program, the consent order stated that FCA must "refund the purchase price paid by the first purchaser of the vehicle for purposes other than resale, less a reasonable allowance for depreciation, and not including the cost of modifications made to the vehicle after the first retail sale." To sweeten the deal, a 10 percent premium will be factored into the initial purchase price. Not a bad deal actually and this was defect based, not fraud based. I think VW would be incredibly lucky to have such a settlement.

tantalor 11y ago

If the warranty/purchase agreement indemnifies the manufacturer against lost value, then they won't pay anything. Did you read the whole contract?

thrownaway2424 11y ago
The law (in the USA, and many of its states, at least) prescribes what can and cannot be disclaimed in a warranty.
papercrane 11y ago
Depends on the consumer protection laws of Germany, but I doubt that bit of the contract would hold up in court.

cptskippy 11y ago

I'm not sure there is a way to fix the cars without a hardware retrofit if that is even a viable option. Someone on reddit (https://www.reddit.com/r/business/comments/3ljng2/volkswagen_ordered_to_recall_500000_cars_after/cv6y2uo https://www.reddit.com/r/business/comments/3ljng2/volkswagen...) suggested the only way they were able to pass emissions was to keep the exhaust gas recirculator (EGR) operational during the test reducing NOx emissions. Keeping the EGR open has a lot of drawbacks and probably isn't a viable long term solution as it results in loss of power in the engine, reduced fuel economy, greater wear on the engine, increased particulate emissions, increased overall operating temperatures. The later drawback would probably require a hardware solution. A diesel engine with an EGR operating doesn't efficiently burn off all the fuel which, in addition to loss of power, produces greater particulate matter (pm) emissions which intern need to be filtered from the exhaust. The exhaust filters can become clogged with pm soot and the way it's cleansed is by injecting and igniting fuel in the exhaust to burn off the soot. If the EGR was continuously in operation then this burn off process would happen with greater regularity increasing the operating temperature of the exhaust system which would probably require more heat shielding and cooling. Another option is a selective catalytic reduction (SCR) system. Assuming one could be retro fit on these cars, an SCR would probably have the last impact on the vehicle's operation but would introduce new maintenance concerns for the operator (DEF fluid) and Volkswagen.