Thursday, November 26, 2015

An Open Letter to Volkswagen

An Open Letter to Volkswagen ,

A quick look through my record will show a good customer who liked his first Volkswagen, a 2013 CC, so much, a few months later he leased his second, a 2013 Tiguan.  This is a relationship that should be truly valued as you had the opportunity to keep a new client for life.  How many vehicles would this be?  

Instead, I feel betrayed and abandoned.  Here's my story:

In late Oct. of 2015, I was looking at the reality that work was going to take my wife and I away from the US, on and off, for almost six months.

Rather than pay to have both vehicles sit idle, we decided to terminate the lease on one of the vehicles - about six months early.  We'd still needed the other vehicle when we were home.  

When I called for the payoff amount on the car we wanted to return, I was told the amount would be in the high $15K.  

The person from Volkswagen credit went through my options for disposing of the vehicle; sell it to an individual, sell it to a company such as CarMax, or return it to the dealer and have them sell it at auction and pay any difference between what the car sells for and what is owed.

I decided that CarMax would be my best solution as I was told, short of finding a private party (which I simply didn't have time to do) CarMax always had the best deals for the sellers.

I expected with an early termination there would be costs, but what actually happened I did not expect.  At the same time that I was investigating these options, the entire malfeasance with the diesel versions of Volkswagen cars was exposed.

Thus, when I talked to CarMax, I was told flatly that I would not be happy with any offer they would make.  I was informed, even though my car was not a Volkswagen diesel, the uncertainty surrounding the brand and the truly onerous nature of Volkswagen’s actions in rigging the diesel's smog reports was lowering the value of all Volkswagen vehicles - including my vehicle.  I was told I would be better off trying the dealership or a private party.

So I drove down to the dealer, Volkswagen Santa Monica, to have the car both serviced and appraised.  This is when I got my second surprise.  There was going to be a recall on the vehicle for a problem that did not yet have a solution and that it would be 4-5 months before they might know what action to take.  Due to this, Volkswagen Santa Monica would not even appraise the vehicle much less take it to sell.  They flatly refused the vehicle.

With only a day to go before I was leaving town, I tried Autotrader, where I received a cash offer of only $14,226.

Instead of taking this offer, I called a friend who deals in cars and asked if he would consider trying to sell the vehicle on my behalf on consignment. I'd continue to pay the lease and insurance until it sold.  

We confirmed that my payout was in the mid to upper $15K.  I told him if he could make any money on the car, that would be great.  If not, I would pay the difference.  I just needed a hand, and as the gentleman was a dear friend, he said yes.

In about a week, he was able to sell the vehicle for around $15,600 - the fair market value of the vehicle.

On or around November 13th, 2015, when my friend went to pay off the vehicle, he was told he was unable to advantage himself of my payoff amount (around $15.5K) but as a dealer, he was obliged to pay "fair market value," as determined completely by VW Credit, that came to $17,667.  

This is where I start to get really, really angry.

First:  As shown by the difficulty I had in disposing of the vehicle, $17,667 was not fair market value for a tarnished brand with a pending recall.  CarMax, and even Volkswagen of Santa Monica would not make an offer on the vehicle, and Autotrader only offered $14,226.  

The price VW Credit quoted was an inflated price designed not by reality, but by greed.

Next:  The friend who was doing me the favor, was working as my agent, selling the vehicle on consignment and should have rightfully been given all my privileges as a valued Volkswagen customer.  He should have been charged my payoff, not an inflated, "unfair" market value.

But most importantly, in a lease, the fees and schedules are determined based on the good name and track record of the car company and how that relates to the projected residual value of the vehicle at the end of the lease.  

In light of the circumstances my argument is that the entire lease should be nullified as Volkswagen, through their official actions and illegal acts, did not act in good faith at the time the lease was entered into.  The entire lease could be determined based on a lie - as could all leases entered under the same circumstance.

Here's where we are:

If Volkswagen wants to keep me as a customer, they need to do right by me (and the rest of their customers) in this situation.  

Volkswagen needs to honor the payoff amount I was offered and refund the difference between that and what my friends was charged as I am personally writing a check for that amount to my friend who sold the vehicle.

Volkswagen also needs to take financial responsibility for the vast depreciation of my vehicle caused by their illegal actions.

Finally, Volkswagen needs to make an allowance for the fact the vehicle had a pending recall which made it impossible for me to return it to the dealer, as I was promised.

If Volkswagen continues to insist, as your agent did over the phone, that my lease was "written in stone and can't be changed," then we have a much bigger problem.  It is Volkswagen that has failed to honor the terms of my lease; I followed it to the letter.

Now Volkswagen needs to fix this problem.

Craig Stuart Garfinkle 
Lease #877020354

You can read an in depth description of VW's actions here:

Update:  It's now 2018 and I still have not had the issue resolved.