Volkswagen's $1,000 "goodwill" gesture to diesel owners

Nov 9, 2015 6:39 PM by CBS News

Looking to placate U.S. owners of diesel-powered cars outfitted with devices to cheat emissions-control tests, Volkswagen on Monday said it's sending those customers gift cards worth $1,000.

The offers are a token of goodwill to the owners of 482,000 cars in the U.S. whose 2-liter four-cylinder diesel engines are part of an ongoing scandal involving software that Volkswagen has said is installed in 11 million cars worldwide.

Yet the gesture may not play so well with motorists whose vehicles have dropped sharply in value -- and more than double that of the value of the gift cards being offered -- since the Environmental Protection Agency first disclosed the issue withnearly half a million Volkswagen diesels in September.

The average auction prices of VW diesel models have dropped nearly $2,100, or 16.1 percent, since the EPA announcement. The unaffected gasoline models have fallen just $500, or 4.4 percent, according to the latest pricing information from Kelley Blue Book, which said that's in line with the average for all used cars. Added Kelley's Chintan Talati: "There is some seasonality at play, too. (Prices) can also go up as well."

"We are working tirelessly to develop an approved remedy for affected vehicles," Michael Horn, president and CEO, Volkswagen Group of America, said in a statement "In the meantime, we are providing this goodwill package as a first step towards regaining our customers' trust."

Letters and emails to diesel owners are being sent Monday, detailing eligibility for the package, which consists of a $500 prepaid Visa card, a $500 Volkswagen dealership card and free 24-hour roadside assistance for three years.

The package comes without strings, and customers will not be obliged to sign a release or waive any rights, a spokesperson for the company said.

"It's like a man bringing a dozen roses to his wife or girlfriend for getting caught doing something he shouldn't have done, or not doing something he should have done," Eric Lyman, vice president of industry insights at, said. "It appears as though they are just trying to buy some time."

Volkwagen's offering is "only going to go just a little ways to help ease the pain for consumers that thought they were buying one thing and got something they didn't bargain for," said Richard Hilgert, senior equity analyst, automotives, at Morningstar. "It is more of a short-term measure because they're talking about a recall campaign lasting throughout 2016."

Volkswagen's move comes ahead of a Nov. 20 deadline for the company to submit its plan to resolve issues with U.S. cars.

Motorists who want to know if their vehicle is affected, can and click on the "learn more" button, the company said. To be eligible, consumers must be the registered owner or lessee of a 2-liter Volkswagen TDI vehicle ("Affected Vehicle") as of Nov. 8, 2015.

Audi of America will follow up with a similar program on Friday, Volkswagen said.


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