We here at TTAC spend a good part of our time trying to discern a car’s subjective worth. But the free market provides the final judgment. And when it comes time to rate an automobile manufacturer’s overall vitality, resale value is the way to go. Foresight, engineering and design all figure into what someone is willing to pay after the new car smell fades, when there’s a couple of Cheerios in the seat rails. Forget professional pundits and industry analysts; residual values are the ultimate arbiter of a carmaker’s strength. And guess what? Volkswagen is America’s most valued carmaker.
Taken collectively, Volkswagen’s U.S. lineup holds 48 percent of its value after five years. BMW, Honda and Acura are close behind, each with around 45 percent retained value. While only the VW Eos won its individual category, the Rabbit and Jetta both manage to retain greater than 50 percent of their value after five years. VW’s models placed high enough in all of their classes to earn the top spot.
This startling stat arrives via Kelly Blue Book (KBB), who just published their predicted resale values rankings for the 2008 model year. A fluke? A statistical anomaly?
Well, KBB’s methodology does help VW. Only automotive brands with four or more models for sale in the U.S. are included, and all of those vehicles must cost under $60k. Still, Honda and Toyota have no trouble playing by those rules; they’re this year’s runners-up. And, the findings are not that different from KBB’s competitors in the value ranking business.
Automotive Lease Guide (ALG) has been tracking values and selling their knowledge to banks, leasing companies and the automotive industry for more than 37 years. ALG announced their Residual Value Awards in October. Here Volkswagen placed third, behind Honda and Toyota respectively. Another excellent showing. Of course, they also have a methodology which aids VW's cause.
This year's ALG awards are based on 2008 model year vehicles, just like Kelly’s, but comprising only a three-year history. (This is the sixth year ALG has included a brand award.) The envelopes are sealed after a careful study of segment competition, historical vehicle performance and industry trends. The trick here is the split.
ALG differentiates between standard and luxury vehicles. In fact, ALG produces a whole second list. So VW didn’t have to compete with Infiniti, Lexus and BMW (to name a few). ALG also excludes marques with fewer than four models. So that put MINI and Scion out of the brand running– which is significant given that MINI scooped the compact category. (Both brands are also excluded from KBB’s list.)
Volkswagens may have found some advantages within the rules, but it doesn’t detract from the validity of their ranking. KBB and ALG produce similar results at the top of both their lists, and at the base. KBB relegates Suzuki, Kia, GMC, Mercury, Dodge, Chrysler and Ford to the bottom of the worst performers for regular old vehicles. ALG’s methodology differed, but the names remained the same. And as for luxury cars, Cadillac, Jaguar, Lincoln, Saab and Volvo all fell below average in both ALG and Kelly’s final reckoning.
There’s a truckload of reasons why a carmaker might find itself parked at the bottom of these residuals lists. Unreliable vehicles, poor image, bad service, a wavering corporate future; each carmaker suffers its own particular frustration combo plate. Volkswagen has hardly been immune from these missteps. But with the Phaeton’s fade to black and a pruning of the pricier Passats, the people’s car has inched back into customers’ good graces. No to put too fine a point on it, most Volkswagen’s are what buyers want them to be.
Volksie has also paid attention to the laws of supply and demand. VW is fairly strict with pricing and, more importantly, doesn’t dump an undo number of cars on North American lots. They build what the market will bear, avoiding huge Rabbits warrens in rental fleets waiting to nibble up space on used car lots. Price and supply find a natural equilibrium that results in relatively high resale values.
Volkswagen won only one of its categories, as divvied by ALG. The Eos took best sporty car (a suspicious sounding group). As in decathlons, it seems that being the best at any one thing is not as important as being solid overall. That might be the wider lesson worth learning.
Taken car by car, VW is nearly never number one. Taken as a whole, VW is doing a great job generating value. That type of continuous performance seems to engender a consistent level of trust in the market place. Volkswagen might not be making the biggest bang with any one car, but playing together they’re getting it done.
Rail all you like against Volkswagen’s reliability and the brand’s piss-poor dealer service. But the market has spoken.
Just looking at Jetta TDi resale values makes one realize that somehow VW is coming out smelling like roses despite all the complaints about quality and service worries. I have to admit, I have the TDi bug myself and will be the first in line to buy a new “clean TDi” when they arrive (we hope) in late 2008.
The market may have spoken, but I don’t give a flying fiddle! In the UK VW’s resale values or average. Honda and Toyota have the best resale values. I bought a Toyota Yaris for £11K. Three years later, it’s worth £8K. Not bad, eh?
For the record, VW does have good quality interiors and some nice looking cars. But for me, VW falls short of the mark.
Yes, their reliability is poor and they have made some stupid decisions in their time (VW Phaeton, anyone?) but as a brand, it just doesn’t make the grade for me. I look at a VW car and I just think I could spend my money much better and wisely. I could spend £20K on a Golf plus or spend £13K on a fully loaded Ford Focus and keep the £7K for booze and cigaret….erm I meant, clothes and shoes! Ahem! Not very lady like! Or £15.5K on Toyota Auris or Honda Civic. VW is a brand in which you pay a premium for an everyday car. What’s the point? Why pay an extra 25% for car which you get from Ford, Toyota or Honda better specified?
Once in a while VW do pull an ace out of their sleeve (DSG, Quattro system) but they just aren’t perceived as the fore front, technologically speaking. I don’t think they do themselves any favours, when they hold onto stale technologies like diesels (Bluemotion) and shun hybrids which far superior. It makes them look backwards.
I think VW need to redefine themselves. Their brand is a bit of a mess and their pricing is all over the place. (For instance, you can spend £14K on a top of range Polo. Or spend £15K on a top of the range Honda Civic. Which would you prefer?!) I do like VW, but their are too many factors against them for me to consider their cars.
Your free market argument in respect to residual values is absolutely right.
But the American market has also spoken in another way, which is equally profound — it largely avoids VW’s. Clearly, VW doesn’t offer most consumers something that they really want, otherwise they’d vote with their dollars to buy them. Americans buy other cars, instead, which is a pretty clear message that something is amiss with VW. For a mainstream automaker, it sells very few cars compared to what a good brand at its price points should sell.
VW is in a tough spot, at least in the United States, because it is positioned as a niche maker, yet it also has to compete on price. If a niche maker is to be profitable, it needs to command a premium price to make up for the lack of sales volume. But VW’s aren’t desirable enough for most consumers to justify a purchase, let alone a price premium.
The residuals in this case are a measure of good inventory management. But VW loses money in the US, because it can’t cover its fixed costs on these low sales volumes. So ultimately, the inventory management isn’t necessarily a saving grace, because it still bleeds money at those low production volumes.
Here’s another way to look at it — If VW produced cars at the same pace as a Big 2.8 company such as Ford or Chrysler, then it would be another major player in the fleet business. At those volumes, VW would have to get into the rental car business because there wouldn’t be enough retail buyers to pick up the slack.
And since it can’t afford to continually lose money in North America, VW is going to have to figure out how to either get us to happily pay a lot more for Jetta’s or else find a way to pump up the sales volumes to levels at which it can sell cars at retail for a profit. The only problem: the cars in its current lineup aren’t desirable enough to enough people for any of that to happen. The main reason for this is simple: they break too much.
Funny that the golf is so expensive in the UK (maybe because it’s a golf plus). It’s pretty much the same cost than a civic in the U.S. And while I like the European civic better, I think the rabbit is superior to the U.S. civic (except maybe for that stupid 5-cyl and name). Oh well, that’s good news for me, I was thinking of selling my ’02 golf!
The only problem: the cars in its current lineup aren’t desirable enough to enough people for any of that to happen. The main reason for this is simple: they break too much.
Amen to that! I really want to like VW cars. I know a few people who drives A4s and have a brother who owns a Jetta TDI. I’ll freely admit that they’re all nice cars. I’m a little envious of the TDI’s fuel milage, and I drool a little when I see a GTI drive by. But then I hear my brother tell me about his $100 oil changes and everyone gripe about little things that are constantly going wrong… and suddenly the lust evaporates.
Lack of clarity around what is measured produces erroneous conclusions.
Resale value is typically calculated as the ratio of the value of a used vehicle over its original suggested retail price. How ridiculous! Maybe my Semitic roots are showing, but I don’t pay retail for a car. Do you?
Because the measurement is so arbitrary, it produces this confusion. If you look at the ratio of used car values over original SELLING price, you find very little variation among makes.
VW finishes high on these “statistics” because they reduced dealer margins, meaning dealers had little room to negotiate, keeping selling price closer to MSRP. That is the only reason.
KBB is taking a WAG at the Eos value. This is a car that has only been offered in the US market for about a year, in a segment that is not much older. What will the values be once widespread complaints of dried seals causing leaking roofs make it into the public’s perception of these cars?
I will take on the defense of VW, since everybody else here seem to be non-fans, and point out a simple point: Have you seen how many early 20 somethings drive Jettas and Golfs? When my daughter and her friends are around it looks like a bloody VW dealership, with some Hondas and Toyotas sprinkled in. Now we live on the left coast in an urban environment, but just off hand, do trends move in from the coast, or the other way around? Just asking. Wander down the Yakima valley and you’ll note that clapped out Hondas are still worth a fortune to a certain ethnic group, and if white 20 somethings like the style of VW, I would hesitate before I would get all whiny about their perceived quality. It may not matter as much as you think, when “feel” is so important. Point: Why do Ipods, in many ways inferior and overpriced compared to other mp3 players, dominate the market? Reliability? Hahahaha.
cratermeister: “But then I hear my brother tell me about his $100 oil changes and everyone gripe about little things that are constantly going wrong… and suddenly the lust evaporates.”
Who in their right mind would fork out $100 for an oil change? That is insane. I own a Jetta TDI. I *love* the fact that the car averages 50 MPG. Beyond changing the timing belt (which requires special tools I don’t have) I’ve done ALL the maintenance on the car myself. Oil changing is the most basic, and on a TDI with it’s upright filter, most easily done work anyone can do on their car. Why people don’t do it themselves boggles my mind. If you can make yourself coffee, you can change your own oil. If you can’t do it hand in your man card.
Now I can understand not wanting to do it, but not knowing how is silly.
But paying a DEALER to do it is just plain stupid.
If there is one thing I hate about this industry it is dealers, and VW dealers are among the worst.
–chuck
http://chuck.goolsbee.org
Pch101: I remember reading a while back that Volkswagen plans on scaling back some of the engineering and technology in their next generation of cars. That may be one of their strategies to become more profitable in the US. From a technological standpoint, the GTI seems like a steal at it’s current price.
I’m a bit surprised at VW’s resale values. Never knew they were so high. Maybe the previous-generation VW R32 is keeping all their numbers afloat. Those things are still selling for 80% of their original MSRP. Saucy owners of low-mileage cars sometimes price theirs around 90% of the car’s original MSRP.
Residual values are based on a percentage of the MSRP and are crucial for “captive finance companies” that are the primary players in the closed end/walk away lease business.
Be it ALG or KBB they do manufacturers and their captive finance companies a service in being the “independent” consultant that arrives at “independent residual values”.
When the lease comes to term usually in 36 months, and the residual value is converted to “cash” that is the moment of truth. Many variables and assumptions can change both within the control of the manufacturer/captive finance and completely out of their control. To affect the conversion of the residual value to “cash”.
If you look at the ratio of used car values over original SELLING price, you find very little variation among makes.
I agree. Right now, you can get a Dodge Ram in the Dallas area for around $10,000-12,000 off MSRP. If the residual after 5 years is 30% (just made it up) on a $31,850 truck (currently advertised for $18,260), then it is worth $9,555. That is 52% of the selling price.
By the way, I do know a couple of people who have actually gotten the advertised deals on trucks recently – they are desperate to sell them.
KatiePuckrik: I wouldn’t consider diesel and hybrid technologies mutually exclusive. A world-class diesel engine mated with a good hybrid system would be the best of both worlds. Maybe Honda can pull it off.
SherbornSean:
I don’t think I’m following you correctly. You are saying that the reason VW does well in this metric is that VW dealers have little room to negotiate? By that reckoning, if VW dealers started SELLING for less, that would actually cause the ratio to get higher.
Perhaps the gist of what you were saying is that other brands have lower ASPs because of their room to negotiate, which drives down resale values?
Even if we accept that, it’s blatantly inaccurate to say the ASP/resale ratio is consistent across manufacturers. Compare 5 year old Echos, Neons, and Golfs, if you want an illustration of this.
Polpo,
Citroen are on the case with diesel hybrids. 2008 will be their debut and initial reports say they’re pretty quick!
Yowser!
“Co-op? There were so many Volkswagens in the parking lot I always assumed it was a unitarian church.”
I think the numbers are skewed by the specialty models, specifically the TDIs and the ’04 R32s.
Take the R32s away and you are left with TDIs doing the yeoman’s work and the rest of line at or below average resale values.
I base this on selling my 99 1/2 Jetta TDI on ebay, with a long documented & disclosed spotty reliability record, 5.5 years of service and 82,000 miles for 45% of its sticker price.
Comparables on ebay for my 2003 GTI with 4.5 years and 75,000 miles suggest that it has only retained 32% of its sticker price.
If and when Toyota, Honda and Subaru begin offering affordable diesel choices stateside, I expect the specialness of the VW TDI in the used market will go away in a puff of black soot.
undo “undo”. undo is undue unless it is “undue”.
Maybe the residuals are so high because VW has such a die hard following, combined with there not being an excess of models available. Those VW owners can be pretty nutty sometimes; kind of like Mac people.
Passive,
SS is correct. The selling price is irrelevant. The methodology is flawed.
VW’s strategy is a good one for protecting resale values.
Here is how the methodology works with hypothetical examples.
The VW Thing lists for 20k. The dealer pays 17k. The average selling price is 18k. After 5 years the resale is 9k or 50%.
The Dodge Dart lists for 24k. The dealer pays 17k. The average price is 18k. After 5 years the resale is 9k or 38%.
As you can see, because VW gave the dealers no way to use discounts to sell volume the resale values hold up much better. The dealers can’t sell for less or they would lose money. (They actually would lose money at $1,000 a car unless they were getting some sort of hold back or rebate). By keeping small margins, VW protects your values from dealers getting nervous and having a fire sale. Those fire sales move the value of the cars down because buyers have a REALLY hard time paying more than they could have yesterday. They tend to go down the street and buy the other car because it is less painful.
As the domestics are learning now, the market gets addicted to cheap prices, rebates, and discounts. The withdrawal symptoms are a real B*%$#.
Forget professional pundits and industry analysts; residual values are the ultimate arbiter of a carmaker’s strength.
I cannot disagree more. As pointed out by other posters, residual value is not an exact science and could be skewed.
IMO, sales volume is the ultimate arbiter of a carmaker’s strength, in a free and fair market. For example:
Accord is the best-selling sedan in 2007 so far and it’s the strongest among its peers.
CRV is the best-selling cross-over in 2007 so far and it’s the strongest among its peers.
… you get the idea.
How many vehicles has VW sold in the US this year ?? Not many. In other words VW in the US is irrelevant…so who really cares about resale values against vehicles Americans have voted against. And some call for Buicks death ?
umpter85:
Buick YTD: 158,146 (-23.4% c/w 2006)
VW YTD: 192,336 (-2.9%)
Given that VW has one of the lowest average age of purchasers, it’s not hard to figure out which brand is driving fleet-first into the grave.
Given that VW isn’t making any profit in the US, I’m not sure what to make of this news. Will VW continue to have good values when they bring to market the rumored decontented Jetta and Passat?
re: TDI oil changes.
The newer model TDI engines (2004+) require an exacting engine grade of oil that I’ve yet to see in any brick and motor autoparts store. Failure to use the 505.01 oil results in premature wear and engine failure, and VW can, and will, void the warranty for failing to use the proper oil grade.
I believe I paid somewhere in the market of $180 for the supplies to do three oil changes to my TDI.
Love or hate it, that’s the way it is and I’ll accept that. What does get my angry about VW fluid choices is they can’t use a common powersteering fluid ($30 for a bottle, found in only one of the 10ish parts stores I called at in my area) or a common coolant (G12+, which I’ve also never seen in a parts store). Then, there’s the really big one, their ridiculous “lifetime” automagic transmission fluid, which is not only highly expensive and exists only in VW parts counters, but requires a lift and a VAG scan tool to even _check_the_level_, much less change.
But, I love the car. What can I say? I know its ridiculous.
The companies that require the services of ALG are not interested in the retail selling prices of vehicles.
They are interested in quickly and efficiently converting residual values to “cash” the auctions Adesa and Manhein are the go to resource to establish residual guidelines.
Here is an example if on average there are 16 million new vehicles delivered in the US, and 30% are leased that is 4.8 million residual values that are guaranteed to the lessee by GMAC,Ford Credit, Toyota Credit and so on. If they are out by 1,000 per vehicle its a potential loss of 4.8 Billions. Taking a 36 month time frame there is a potential risk of 3×4.8= 14.4 billions it could be less and it could be more.
Its the reason ALG, Adesa, Manheim produce monthly and quarterly reports on where the “wholesale” market is trending, its also the reason residuals are adjusted downward as the model year progresses.
The various CPO programs are the instrument that manufacturers use to raise the value of used vehicles.
Adesa and Manheim do not care about the quality of vehicles, they are in the business of converting residuals to cash.
A friend in the real estate business has a leased 3-year-old VW Jetta, gasoline version. He says it’s the best car he has ever had; large enough for four adults, easy to buzz around the city, handy to park in tight urban spaces, great trunk and good on gas.
I keep waiting for one or more of the well documented VW horror stories to blow his automotive rhapsody to hell, but so far nothing. Excepting an early minor problem with the emissions system, he has had no difficulty with it and has no complaints about dealer service or costs.
Maybe they’re getting better.
Not to get sidetracked, but I don’t see the point of a decontented Jetta. So they can sell more of them? Why would I buy it when there would be so many other better choices at the lower price?
And even currently owning a somewhat problematic Jetta, a five door GTI would replace it in a heartbeat if it wasn’t for the dealership. I’ve dealt with two, one in NY and one in NC, and they are the absolute worst. I’ve always loved VW and have put a lot of time, effort, and money into my Jetta, but this will be the last VW.
Starlightmica: You have made my point—however you look at it both VW and Buick are not maintaing enough buyers to be relevant. BTW—do you have a per model breakdown on how VW gets to 190K vehicles sold in the US ?
Buick by buyer deaths—VW by luring in younger buyers and delivering cars that aren’t reliable—thus repeat brand purhase on VW is lost for life. As a former owner of a GTI and Passat—I can speak to the VW owner retention issue.
Seperately—-we nail Ford for not givng us the Euro Focus—what is it with VW that the US market has to wait on 1-3 years on models (re; Golf) while Europe has them. Maybe because VW sees the US market as irrelevant to their business model ? The price of the $ / Euro might have something to do with it as well.
gfen :
VW fluid choices
I have the ‘lifetime’ coolant in my audi. Too bad the radiator has to come off to change the belts.
VW has all the younger buyers because after you own one you learn your lesson and go somewhere else.
VW sales breakdown:
http://media.vw.com/article_display.cfm?article_id=10237
Yikes! VW only sold 292 R32s in October.
Autotrader lists 846 new 2008 R32s available in the U.S.. Assume the unlisted cars are a wash for ones that were already sold but still listed and VW of America is sitting on an almost 3 month supply of a limited edition model.
I guess The Truth really is is out on the new R32.
My take on this is that VW has higher residuals due to lack of competition. If you want a non luxury car with Euro characteristics in the U.S. there are few choices other than VW. This market may not be huge, but it appears to be under served.
Pch101 and SherbornSean:
Good posts guys. Your arguments are quite persuasive.
Given that, I can only agree that the conclusions this article has drawn is based on flawed methodology although the “free market has spoken” part is essentially true.
I’ve always thought that Saab would make a natural competitor for Volkswagon.
Saab used to have a loyal fanbase and quirky yet fun and slightly upmarket cars.
Lets face it, Saab cannot compete with BMW or Benz any more than VW can, but both brands could offer affordable euro experience.
And despite those residuals, you can probably still lease a similarly equipped BMW 328 wagon for about the same as a 4 door gti w/dsg. At least you could last year.
@Prado:
That’s because they all died for the same reason VW is dying now: a combination of so-so to poor reliability, inconsistent quality and high prices. Renault, Alfa Romeo, Fiat, Lancia, and Triumph have all left the U.S. and only Alfa may return.
Blunozer,
Saab has been a natural competitor to VW in the states. Both have favored simple to mod turbo applications and were stylistically different from the domestic and Japanese offerings and both have strayed from their fan bases. I would say that Scion and Mazda have also eaten away at Jetta/Golf sales.
Stuki,
Last year I purchased a 4dr GTI, DSG, package2 and a comparably equipped 328 with leather, xenons, sirius and ipod adapter was over $10K more. The monthly lease costs were closer but still nearly $100 apart. The VW premium has nothing on the BMW premium.
VW finishes high on these “statistics” because they reduced dealer margins, meaning dealers had little room to negotiate, keeping selling price closer to MSRP. That is the only reason.
Not always true. A relative of mine bought a new 30K MSRP Passat for 5K off this past summer. But for the most part they seem to do a better job than most at managing inventory to avoid high discounts.
It takes a little work to successfully own a VW. When dealers tell you a key part is unavailable, you consult the net’s most vigorous online car communities (vwvortex.com, tdiclub.com) and find a better part, cheaper, on your own. When dealers tell you it’ll be a $140 shop hour to read error codes, you consult a “trusted guru” in your area for much less dough. It’s like… it’s like owning a foreign car, back when that was a rare thing, 20 or 30 years ago, except then you didn’t have the ‘net to help locate resources.
The rewards come in the driving experience, and the selling experience. If I were to offer my five-year old Golf TDI, with anything less than 100 K miles on it, I could expect a bevy of offers at 50% the new price or more. The VW diesel brings a premium of thousands over its used gasser bretheren, and it’s at peak prices now that new ones are temporarily off the market. But who wants to sell a quiet, fast car that gets 35-50 mpg and runs on renewable fuels?
Sure there are hassles involved, and extra expenses that accompany a premium product. But it works out in the long run. Folks told me Apple computers were expensive, too, but I sold my last mac desktop, after three years, for 70% of the new price. Anybody making that kind of return on a Windows box?
Interesting editorial but I still don’t understand this phenomenon or VW buyers for the last 5 years. My best friend and his fiance both have VW’s an my brother just bought a used one and I still don’t get why you would subject yourself to such a horrible ownership experience. And this is coming from a former Alfa Romeo owner who is eagerly awaiting their return. I understand the fun to drive factor because I really like driving them also, at least some models, like my buddies GTI and the old Jetta’s. And I like the nifty little details you get that you can’t find in other cars, BUT the cars fall apart and on top of that you have to deal with a VW dealer. I would rather get kicked in the nuts repeatedly than ever have to deal with another VW dealer in my life. It’s like the double whammy of why on earth would you buy from them. The Jetta I was forced to drive for a week was horrid, it didn’t feel like a VW at all, it was over the road and slow as dirt with that 2.5 mated to the 6 speed auto. It was not at all what I expected from them, like they lost their magic.
The dealers really irk me thou, how do you other owners who actually own VW’s deal with them while your car is still in warranty? Our local Subaru dealer is also a VW dealer, actually it is a VW dealer with a pimple sized Subaru limb. I essentially told the Service manager to screw themselves after the constant rudeness, blatant disregard for common curtosy, damage to my car, high prices for simple oil changes($50 for an oil change and they f**ken over filled it), over 6 months to get my radio replaced, software screw ups, never calling back and never fixing anything right. I told her flat out that I am taking my car 2 hours away to a real Subaru dealer rather then give them one more cent of my money or warranty work.
If this is even remotely what you owners have to deal with your crazy, it’s not worth the driving experience. My best friend just brushed it off saying, “yeah they are all like that” like it was nothing, and there were a lot more f-bombs when I told him. I agree with an earlier poster about finding a local guru shop and ditching the dealer once out of warranty, that’s what my brother is doing with the TDI Bug he just got used(dealer wanted to rape him for a new fuel pump, $2000), but what the hell do you do when you HAVE to bring your car in for warranty work. And since this is a VW it needs a lot of warranty work those first 3 years with bits and peaces falling everywhere.
Seriously I want to know how you guys do it since I really liked driving VW’s(1.8T not the 2.5) and if they clean up there act in the future on the reliability I might start considering them again. But only if I can find a way past these Nazi dealerships.
Wow, anyone who buys a 3 year old computer for 70% of the original price is extremely poorly informed. Computers are not like cars, the new model is almost invariably faster, cheaper and more efficient by a massive margin.
The price of the TDI is high because its currently the only game in town as far a diesel passenger vehicles. When the new diesels from other manufactures arrive, we can expect prices to drop substantially.
I must say my own experience with VW products (Audi 4000) has really soured me on their “premium” nature. Like many others, I was lured in by the promise of a premium German product. I was not really impressed by the way a “premium” product left me stranded on the side of the highway. I was also unimpressed by the premium price of components. The driving experience was nothing to write home about either, it was slow and the stiff suspension really didn’t help it go around corners much faster. I can honestly say that the Accord which replaced it was superior in all ways, including acceleration and handling.
Redbarchetta
For some people I guess it is worth the driving experience to own a VW and put up with the dealership while the car is in warranty. These days I personally don’t think anything less than a GTI is worth even considering the hassle. I will have to say that I still love driving the car and in my case it was amazing. As soon as the warranty was up I stopped going to the dealer, and just like that, the Jetta ran perfect for several years. I did go back for the major problem it was having that they didn’t fix the previous three times and to keep me from pursuing the Lemon law they “fixed” it when it was shortly out of warranty. For repair I can’t do myself, I found a mechanic who was good with VWs. And by the way, calling Volkswagen of America is zero help. You might as well press 2 for Spanish (for those who only speak English of course).
OK, so I guess I’ll join the haters:
I owned a 2000 VW Golf 1.8t and a 2000 VW Jetta 2.0. Both cars were a blast to drive, but horrendous otherwise. Here were the major problems, the minor ones are too numerous to list:
All front windows fell into the doors.
Both cars had multiple MAF and O2 sensor failures.
Golf had 5 (that’s right – F I V E) brake light switch replacements in its life.
Many interior components failed: rubber peeling off of plastic, broken glove box doors, broken arm rest latches, broken visor lights…etc.
Oil pans replaced in both cars due to aluminum pan threads that did not hold up to frequent oil changes.
Jetta 2.0L motor started eating 4 quarts of oil between oil changes – got rid of it at that point.
Golf had transmission slipping problems at around 80,000 miles – dealer said transmission is sealed and should not be touched – got rid of it after that.
I could go on an on – but the end result is I now own and Infiniti and a Jeep and I won’t be back to a VW dealer for a VERY long time.
Funny thing – the Jetta got me a great trade-in value, but the Golf had ABYSMAL trade-in value.
-ted
Redbarchetta:
Haven’t you heard? Buying a new VW is like buying an as-is POS from a plaid-suited greaseball. No warranty is either expressed or implied by VWoA. If you use B6 Biodiesel in your TDI, it’s the reason your brake rotors are warped.
Luckily, nothing major on my car has broken, so that’s how I avoid VW dealers. I’ve been to a dealer once for an alignment, which was a year after I bought it. After the treatment I got there, I decided that was the end of stealers touching my car.
I have an ’03 Jetta TDI, now with about 98500 miles on it. The only major thing that has happened is that the coolant temperature sensor went bad about 2 years ago. It was a $5 part, and took about 15 minutes to change out. Beyond that, it’s been a set of rear brake pads, oil changes (which cost me about $30 in parts for 10k mile intervals), some air/cabin filters, and tires. I’ll be replacing the suspension next year and will be proactive and replace the battery soon ($100 from the dealer parts department). The timing belt is due shortly, which runs about $600 for a complete job my local TDI guru’s garage (The dealer wanted $800 to do a basic timing belt job).
I like VWs, but I’ll never drive a gas model. Not quirky enough for me, hehe. My Jetta is supposedly still worth something like $12000 right now according to KBB, but there’s no way I’d sell it.
The GTI is the only thing I would consider, I don’t need anything bigger then that and I like the content. But we are talking far down the road since their cars are to unreliable for me to consider right now. We love our Subaru, but that is my wifes car and I haven’t been realy happy with the direction they have gone lately.
I called Subaru of America a few times about this dealer and the only thing it helped with was for them to call me back rather than brush me off for weeks and weeks. SOA was helpful but the dealer just didn’t seem to give a damn, I still got crappy service.
I just wish there was a way to avoid the dealer after buying the car, or better yet not even having to buy it through there dealers. I guess I’ll be waiting for the day we can just buy cars over the internet and they have mobile service departments that come to your house to service the car. I can dream ;)
crc:
“You might as well press 2 for Spanish (for those who only speak English of course)”
CRC…when calling a call center, theres a difference?
Reading all this hate and bile about VW, I want to jump to the defense of the company that’s made more than half the cars I’ve ever owned. But then I remember the routine so familiar to well-informed owners: love the cars, hate the company.
Hate the company that invented the minivan and the car-based SUV, then stepped aside to let others cash in on the trends? The company that spent lavishly a few years ago to rebuild all their dealerships to a uniform level of architectural gimmickry, instead of investing in better training for mechanics who face a dizzying variety of low-volume models and drivetrains? The company that got sidetracked building Bugattis (to impress the bigwigs’ hired “girlfriends”), rather simply than building a better Bug? The company that brought us fun and fuel-efficient TDI engines, establishing a loyal customer base that’s now abandoned due to lack of new product? Yep, that company.
I even have to admit that there’s nothing in a VW showroom today with any curb appeal to me except for the New Beetle, and you might as well buy a used one, given the scant updating it’s received.
But if VW presents a sorry sight, the other companies are even worse. They’re deep in endless, futile horsepower wars (like the new BMW 1-series that will arrive with 300 hp — who needs that?) They’re streamlined to absurdly acute angles, like the Honda Civic, or sad and undernourished, like the Focus. At least my Golf is a roomy compact I can sit up straight in. And past its early mid-life crisis around 70,000 miles, it’s been pretty reliable. It better be, because I see no replacement coming down the pike.
like the new BMW 1-series that will arrive with 300 hp — who needs that?
ME ME ME!(raising his hand like a little kid) the more the marrier. Oh wait BMW’s are just as unreliable, I’ll wait.
Funny, for all the bashing Saab gets, this thread reminds me why I dumped a Jetta 20 YEARS ago for a 900 and haven’t looked back since.
But I still have fond memories of an 84 Rabbit GTi and a 71 Superbeetle…..
I want a 135i, but I shouldn’t get one. BMW uses slave labor and burns gays at the stake.
Congratulations to Volkswagen for being the resale champion. Too bad they consistently lose about a billion dollars a year in the U.S. market.
“At least my Golf is a roomy compact I can sit up straight in. And past its early mid-life crisis around 70,000 miles, it’s been pretty reliable. It better be, because I see no replacement coming down the pike.”
Yep, I would peg the life of a VW at right around 140k.
If you’re into the leasing game or like to replace your metal ever few years, VW is definitely a consideration. The value quotient falls off a proverbial cliff after the first few years of warranty though. To me the only good VW’s are the ones that aren’t built in high volumes… and they are obviously few and far between.
I don’t understand, Stephen. The “life” of a car lasts until it rusts beyond structural integrity, or the cost of repairs can’t be justified by the residual value, or you wreck it so bad it’s totalled.
VWs are built of virgin steel, double-galvanised, so they’re as immune to rust as they come. The expected service life of my turbodiesel engine is measured in hundreds of kilomiles, and the residual value remains amazingly high (I have about $5k in paper equity in a car that’s been leased for four years and financed for two more. Can you beat that?) Wrecks? Well, no car can prevent them, but few cars will protect their passengers any better if they occur.
Yes, my brake light switch is malfunctioning– again. I’ll replace it next week, and next year too, perhaps. But the little nits and niggles that put so many knickers in knots when they happen to VWs have little to do with the usable “life” of a car, IMO.
Wheatridger just give it a little more time and you will see what Steven Lang meant. I had VW once and the structural integrity and corrosion resistance were indeed world class. It was just everything else that failed.
Agree with Sherman Lin. Is rust really that big a problem? I see plenty of 80s Civics heavily rusted but still running. Not to mention newer car models are all much better in terms of anti-rust.
Indeed, what good is a structure when all the internals have gone bad. I think you will find that the point at which repairs exceeds value comes on sooner than you expect. An electrical system which causes a myriad of difficult to trace issues can make a car almost worthless, especially when some of these issues leave you stranded. As for residuals, I would say that VW is average at best. If it were not for their specialty models their average residuals would be much lower.
Maybe I’m just being bitter after being burned, but I see no reason to own a VW today, there is nothing that they do that is not done better by another manufacturer. Whether its for driving experience, economical transportation, or pseudo-luxury, You are better off with a plethora of other cars.
Their products are sustained by nostalgia and “cuteness”. The original beetle was good because its form followed its function, the new beetle is bad because it is the exact opposite. It appeals to audiences which might buy a laptop because it has a shiny metal casing. (I do wonder what the correlation between mac users and VW owners is , I bet its a rather substantial correlation) Unfortunately for them, cute only gets you so far when it comes to cars.
You spotted me, KBW, I’m a mac enthusiast too. It does have a “shiny metal casing,” but I don’t see that, since it sits beneath my desk. There are similarities between mac and VW. Style and performance and ergonomics are high with both, as are resale values. But to get what seems to concern you most about cars, macs are very reliable; about that point you’ll find little controversy.
I agree that most of VW’s products aren’t so unique. Except for the TDIs. They’re much more rewarding to drive than a hybrid, and return comparable real-world fuel economy. They use renewable fuel, and can be had with manual transmissions. Just where, pray tell, can I go (west of the Atlantic and south of the Great Lakes) to find anything else like that?
I agree that most of VW’s products aren’t so unique. Except for the TDIs. They’re much more rewarding to drive than a hybrid, and return comparable real-world fuel economy. They use renewable fuel, and can be had with manual transmissions. Just where, pray tell, can I go (west of the Atlantic and south of the Great Lakes) to find anything else like that?
Unfortunately, you cannot find a new production vehicle which meets that description. The old TDIs simply produced too much pollution (particulates and nox) and cannot meet the new emission standards. VW no longer makes the TDI and won’t have a new model until mid 2008, by which time other players such as Honda and MB wold have moved in with their own offerings. At most they will enjoy a few months of market control.
True enough. But I’m not really looking for a new car right now. I’m trying to explain why some of us put up with VW’s failings. It’s to enjoy VW’s virtues, which in this case, in this country, are unique. You pose some valid reasons not to invest heavily in VW stock right now. Like I say, love the car, hate the company. But none of that reduces the utility or value of my ’02 Golf. On the contrary, the lack of new diesels has inflated the value of my TDI, which helps lead to the original story here.
VW drivers tend to see both sides of these equations, taking the good with the bad. VW haters, IMHO, tend to be like fans of other technological near-monopolies, like Canon digital cameras and Microsoft operating systems. They insist that their way is not only the best way, it should be the only way.