VW Finance Writes Off Almost $400 Million To Cover Lost Residuals From Dieselgate

The effects of Volkswagen’s cheating scheme on the emissions tests are forcing the company’s finance arm to cover a potential decline in the residual value of cars. The September disclosures have evidently reflected on the resale values of VW’s models, thus making the Financial Services division – which issues leasing contracts to customers – adjust the presumed resale value of its fleet of leased cars and take an extraordinary writedown of 353 million euros (391 million dollars).

“We created extensive reserves on the basis of the leasing portfolio so as to be prepared for any possible decline of the residual values,” CEO Lars Henner Santelmann said after the VW subsidiary published full-year results.
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PUGPROUD - 3/16/2016 6:39:57 PM

+1 Boost

Not enough. Just the tip of the iceberg. Every six months there will another write off as this scandal spreads. VW would be better off taking one huge reserve and let the markets accept the consequences once and put it in their rear view mirror then announcing more reserves every quarter for the next seven years.

MDarringer - 3/17/2016 12:06:09 AM

-4 Boost

It's not that we won't accept a VW in trade, but we go lower than low blue book. We used to have Jettas on our used car lots. Not anymore.