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Last Friday, I received a message from a car dealer who often appears in my Facebook feed. He sent me a certified letter from Volkswagen informing him that he would be receiving a check for more than $18,000 for a vehicle he purchased for less than half that amount just a few months prior.
“Looks like you underestimated the benefits of the diesel buyback…lol!”
This government-mandated recall program aimed to safeguard many Volkswagen diesel owners who were facing the loss of their vehicles. However, not everyone is acting in the best interest of VW owners—or doing the right thing.
In reality, numerous used car dealers familiar with the loopholes of this program are securing even more significant returns, making five-figure profits with no risks involved on individual cars.
“I doubt you can benefit from the VW recall and receive payment since your name would have been registered after their deadline,” I replied.
“I beg to differ…”
Not long after reading my email, this dealer purchased a TDI model at auction, registered it in his name, and then contacted Volkswagen with the necessary paperwork to prove ownership, netting a $10,000 profit.
Of course, that money was meant for the actual owners of the Volkswagen diesel, not for a dealer who conceals the windfall from the previous owner and pockets the proceeds discreetly.
I’ve heard several instances over the past few months of dealers engaging in similar practices. In some cases, the car was registered in the name of a family member, while in others, it was placed in an employee’s name who received a share of the profits.
Regardless of the method used, the result is invariably the same: the previous owner receives a minimal reimbursement, and the dealer keeps the majority of the profit [ED. NOTE: This statement has been updated for accuracy]. Yet, I never anticipated witnessing specific documentation that would substantiate such a case.
I was hardly shocked to learn that the fraudsters at Volkswagen were being outmaneuvered by those skilled in manipulation. This is the automotive industry, where deceit is rampant, deceptive fees abound, and clever players often come out ahead while others suffer losses.
What truly infuriated me was that this dealer was taking advantage of a prior owner—someone he had never met—by registering the title in his name and claiming the check.
He was well aware of the VW buyback program’s intricacies, and the likelihood of being caught was minimal. He received the funds intended to safeguard the previous owner, amounting to over ten thousand dollars.
Indeed, it’s possible he didn’t even break the law. Legally, he was now the owner. The vehicle was registered in his name. Could he assert that his intention was to use the car as a daily driver? Absolutely. Was the victim aware that they were being taken advantage of? Not at all.
There is ample responsibility to share regarding this practice, which many would view as legalized theft or fraud through deception. Volkswagen has facilitated this conduct at the dealer level. For over a year, individuals have bought vehicles like that 2011 Jetta TDI, profiting from the recall at the expense of consumers unaware of Volkswagen’s registration loopholes.
Volkswagen should have implemented a cutoff date for registering the over 400,000 vehicles affected. This would have ensured that those purchasing vehicles prior to that date could receive fair compensation.
Instead of doing that, Volkswagen announced on September 18, 2015, that they would reimburse owners who bought these vehicles without setting a clear deadline. This omission left the door wide open for car dealers to exploit owners and reap substantial profits from the scandal.
Over the past year, many individuals who traded in their vehicles received nothing if the title was shifted to someone else’s name.
None of these vehicles would have qualified for the car dealers under VW’s Buyback Program had the titles remained under the previous owner’s name. By engaging in self-dealing and transferring the titles to themselves, used-car dealers can easily capitalize on this loophole and make substantial profits.
So, who else is losing out besides the original owner? Surprisingly, Volkswagen isn’t losing any money. The $18,000 check will be issued to whoever is the registered owner of that vehicle at the time. If it’s a dealership, then so be it. Ultimately, Volkswagen has to regain the trust of both its dealer network and the public.
Hundreds of vehicles could have been sourced at auctions as Volkswagens eligible for the recall. The rightful owners could have been identified and directly compensated for their losses, allowing for a smoother recall process.
Does Volkswagen care about any of this? I seriously doubt it.
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