Lawsuit alleges VW sold pre-production cars to public

Still dealing with the aftermath of its diesel emissions cheating scandal, Volkswagen has apparently been selling pre-production vehicles to the public, and now the automaker is getting sued for it. In a lawsuit filed in Federal District Court in Virginia, three consumers alleged that Volkswagen defrauded them by selling prototypes that cannot be legally driven on public roads.

The word “prototype” is a bit of a misnomer in this case. Before beginning actual mass production, car companies usually make between about 100 to 400 pre-production pilot or validation examples, also called “zero series” vehicles, to check everything from fit and finish to the final calibration of the electronics. They can also be used to test components not yet approved for production.

Sometimes zero series vehicles are assembled in a dedicated pilot production facility and sometimes they are built on the actual production assembly lines to shake down and test assembly procedures. Those cars are then used as internal test vehicles, loaned to company employees to drive, or used as press fleet cars for media reviews. As they have not technically been certified by government regulators as meeting emissions and safety standards, they cannot be sold. Some have equipment being tested that hasn’t been certified, and some don’t even have registered Vehicle Identification Numbers, or VINs. It should be pointed out that many, perhaps most, media test cars are regular series production vehicles that end up getting sold at dealer auctions.

Once an automaker is done with the pre-production vehicles, it has 30 days to either destroy them, or export them in the case of imports.

In 2018, Volkswagen of America recalled 252 cars that it acknowledged were zero series cars that had been illegally sold to retail consumers between 2011 and 2016.

One of those cars was Ricardo Garcia’s 2016 Golf R. He paid $39,000, about $1,500 below sticker value, which was a pretty good deal for an in-demand hot hatch with less than 10,000 miles on the odometer. He wasn’t informed that those miles had been put on by VW employees testing the car and by automotive journalists reviewing it.

Now, as Garcia told the New York Times, “I paid more for it than I should have, and now I can’t even drive it legally.”

The recall notice offered to buy back the cars at book value. Since that includes depreciation and doesn’t cover things like sales tax and loan interest, Garcia was not happy with Volkswagen’s offer of $27,000. “I’m not going to eat $20,000 that I shouldn’t have paid,” he said. When Garcia received his recall notice, the letter stated that the Golf R was a “very early production” model and may not “comply with all applicable regulatory requirements.”

A second plaintiff in the case, Paul Jacobson, paid $24,018 for a 2015 CC R-Line with 5320 miles, and was offered just $13,300. He likes the car but if he drives it himself, his insurance company might not cover any damages that could occur because it’s not certified for road use, and he can’t sell it to another party because it’s not legal to drive.

Last December, VW issued another recall, this one in Germany, for more than 6,700 pre-production cars sold since 2006, so it appears to have been something of a standard procedure at the automaker. The lawsuit alleges that the practice was stopped, at least on this side of the Atlantic, in 2016 when the diesel emissions scandal broke.

VW says that it is reviewing the lawsuit, which it claimed included “numerous factual misrepresentations.”