Not too long ago VW was caught using cheating software on their diesel vehicles to pass emission tests. This resulted in a very sizable payout to the VW diesel owners, some environmental agencies, and of course the lawyers. What we’ll try to determine today is whether the scandal (dubbed dieselgate) caused monetary damages to non-diesel owners (in terms of vehicle depreciation).
I’ve again relied on CarGurus for their expansive historical dataset of vehicle list prices. We first look at the year on year change in price for each model year going back to ’97 for the VW Jetta as well as its two close competitors, the Honda Civic and Toyota Corolla. Why Civic and Corolla? Both models tend to have a reputation for experiencing stable depreciation.
We show the yearly depreciation rate on the Y-axis (the size of each circle reflects the dollar amount of depreciation). More simply, we are looking at how much the list price of each vehicle dropped over the prior year.
Aside from the obvious fact that newer model years suffer greater depreciation on both percent and dollar basis, we also notice Jetta’s tendency to show larger depreciation relative to the other models. For vehicle model years ‘06 through ‘16, the Jetta’s depreciation rate is consistently higher than for the Civic or Corolla.
But I wanted to show one more graph today. The change in list price over the prior 6 months for the ‘13-’14 model year vehicles. We again have the Jetta, Civic, and Corolla, but I’ve also added the VW Tiguan and the Subaru Impreza. All vehicles suffer a price drop from last summer into present day, but the Jetta and the Tiguan have not appeared to slow their winter slump. The VW vehicles have dropped an average of 8.5% from last August, compared to a drop of fewer than 7% for the remaining group.
What is the lesson here? At least based on this data, VW suffers a worse depreciation than the other vehicles in its peer group. The dieselgate scandal appears to have had a limited impact on used VW prices, but it certainly didn’t help improve the historically poor depreciation rate.