Volkswagen Diesel Car Prices Drop 13% in US

By Douglas A. McIntyre Published Oct 7, 7:50AM EDT

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The amount Volkswagen received on average for sales of its diesel cars in the United States plunged 13% in the period that ran from September 1 through October 3. The sum could fall much further.

According to a study by Kelley Blue Book (KBB), the model years covered were those from 2009 to 2015.

Eric Ibara, residual value consulting at KBB, said:

While early readings suggest that TDI vehicles are being affected by the news, it is possible that they could return to normal levels within a year. This will depend on how Volkswagen handles this crisis and what they announce the fix will be for the U.S. market.

VW management believes that repairs to the cars could begin before the end of this year and extend well into 2016. That timetable only makes the odds of a recovery in prices worse. And it makes sales of the affected 2015 and 2016 models less likely.

ALSO READ: Do Diesel Cars Have a Future After VW Scandal?

Gasoline versions of the same models of VW and Audi vehicles have not been affected as much. KBB shows that the drop in price for these has only been 1.8%.

Early indications from auctions are that dealers are more hesitant to buy the VW diesel units, with sale prices falling 13 percent in the two weeks following VW’s announcement, compared to a 2 percent drop for the comparable gas-powered models. Used car values typically decline at this time of year, but the large price drop on the VW diesels certainly stands out. The gas-powered units haven’t seen the same declines, but these units could take a bigger hit should the negative response toward VW extend beyond their diesel models. As it stands now, the price difference between the diesel and gas-powered VW model has fallen from around $2,700 to just $1,300.

The drop in price is not uniform by model.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.