Volkswagen to Pay Out More Than $1.8 Billion to Struggling Dealers, but Some Aren’t Satisfied

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Automotive Editor

Justin Cupler has specialized as an automotive writer since 2009 and has been published in multiple websites and online magazines. In addition to contributing to CarsDirect, Justin also hosts a web-series car-review show and dabbles in the world of personal-finance writing.

His specialty is in the high-performance realm, but he has a deep love and understanding for all things automotive. Before diving into the world of writing, Justin was an automotive technician and manager for six years and spent the majority of his younger life tinkering with classic muscle cars.

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, Automotive Editor - August 29, 2016

Volkswagen’s Dieselgate scandal has rocked the company to its core, including its roughly 650 dealerships across the U.S. Volkswagen has recognized declining dealer profits, mostly due to the stop-sale of all diesel models, and a drop in dealership values. The automaker is looking to make things right by distributing about $1.2 billion to its U.S. retailers.

This averages out to a respectable $1.8 million per dealer. While this might seem like a welcome gesture, some VW retailers are not fully satisfied. What’s more, some experts also feel this is not enough to fully address the scandal’s impact.

According to the president of a buy-sell advisory firm, Alan Haig, who spoke with Automotive News, this $1.8 million payout would either make up for lost profits or reduced franchise value, but not both. Before the scandal, Haig valued VW dealers at between $250,000 to $2.5 million, but now he values them from $0 through $1.5 million.

Combine the losses in value with the lost profits from the diesel stop-sale—diesel profits made up more than 20 percent of dealer profits—and Haig says the $1.8 million simply doesn’t cover it.

The final details of this payout have yet to be ironed out. We will bring you all of the official details once they become available.

While VW struggles to make things right by its dealers, it continues offering strong deals on the cars it’s permitted to sell. One of the better deals the German automaker is offering is a 36-month lease deal on the 2016 Passat 1.8T S that runs $179 per month with just $1,489 due at signing. In addition to this deal, VW is also offering a $1,000 model year-end bonus on this model and 0.9 percent APR for up to 72 months.

, Automotive Editor

Justin Cupler has specialized as an automotive writer since 2009 and has been published in multiple websites and online magazines. In addition to contributing to CarsDirect, Justin also hosts a web-series car-review show and dabbles in the world of personal-finance writing.

His specialty is in the high-performance realm, but he has a deep love and understanding for all things automotive. Before diving into the world of writing, Justin was an automotive technician and manager for six years and spent the majority of his younger life tinkering with classic muscle cars.

Follow On: Twitter | Website

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