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By Brad Tuttle
October 7, 2015
Brennan Linsley—AP

The ongoing Volkswagen scandal, in which software was installed in diesel automobiles to cheat emissions tests, means that nearly 500,000 cars in the U.S. have been polluting the environment far more than advertised. Only VW diesels are implicated, and yet the automaker brand as a whole has taken a beating due to the grand-scale deception.

According to a survey conducted recently by Kelley Blue Book, 53% of respondents said that they had “complete” or “general mistrust” of Volkswagen. Another poll, released last week by AutoPacific, showed that only 1 in 4 car owners had a positive opinion about Volkswagen, compared with 3 out of 4 with good feelings for the brand before the news hit. Nearly two-thirds in the latter survey said that in light of the diesel situation, they don’t trust VW.

Unsurprisingly, the big hit to the automaker’s reputation has had an impact on car sales—and not just diesels. Kelley Blue Book data cited this week by the Wall Street Journal indicates that prices for used VW diesels have fallen 13% since mid-September. Prices for used VWs that run on regular gasoline are down as well, though by much less (2%). As a result, the price premium that drivers have been accustomed to paying for so-called “clean diesels” has shrunk: Buyers used to pay $2,700 more for VW diesels than VW gas automobiles, on average, but now the difference is down to $1,300.

Volkswagen stopped selling new diesels as soon as it admitted to the manipulation of emissions. Meanwhile, the new cars that VW is still selling—models powered by gas, uninvolved with the scandal—are apparently in need of a big push to get buyers to bite. As Edmunds.com and others have noted, Volkswagen recently introduced a new $2,000 customer loyalty incentive, offering previous VW owners an extra $2,000 off the purchase or lease of a new gas Passat, Jetta, or Golf, now through November 2. This discount can be combined with other incentives, such as dealer-cash bonuses ($2,000 to $2,750 for new Passats, for instance), but not dealer-employee programs. As always, customers are free to negotiate even cheaper deals beyond those incentives and discounts.

With promotions like these, it’s easy to see how buyers can quickly be driving away with new VWs for $4,000 to $5,000 less than the sticker price. Volkswagen dealerships cited by Automotive News say they are happy to have the assistance of the automaker, and that the new $2,000 incentive has helped boost sales, but there’s concern that this strategy isn’t sustainable in the long run. As one East Coast dealership owner put it when speaking of the new incentive, “How long can the factory afford to do that?”

Read next: 23 Ways to Slash Your Car Expenses

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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