Volkswagen is rolling out a new bumper-to-bumper warranty providing owners coverage for six years or 72,000 miles -- whichever occurs first.
The company says the new warranty will apply to most new 2018 Volkswagens sold in the U.S. and can be transferred to subsequent owners.
“Volkswagen has always been ‘the people’s car,’ and with the People First Warranty, we’re putting our customers first,” said Hinrich J. Woebcken, CEO of Volkswagen Group of America. “By bringing the right cars at the right time, and making the offer very competitive, we believe we’re in the position to grow in the US market.”
Shaking off the diesel scandal
The new warranty is being introduced as the German carmaker keeps working to shake off the 2015 diesel emissions scandal that damaged its U.S. sales and car values.
“While Volkswagen’s People First Warranty is intended to instill confidence in the brand’s products after the diesel scandal, it is also an important tool to help addresses new-car affordability," Michelle Krebs, executive analyst for Autotrader, told ConsumerAffairs.
"To keep monthly payments down, consumers are stretching auto loan terms. The Volkswagen warranty extends along with those loans to help save the first—and even second buyer of a VW—repair costs.”
Effective selling point
Rebecca Lindland, executive analyst for Kelley Blue Book, says the new warranty is like an insurance policy you hope you never have to use. She says it can be an effective selling point, as long as the product still resonates with the U.S. buyer.
The longer warranty was first introduced on the 2018 Atlas and Tiguan. It now covers the 2018 Beetle, Beetle Convertible, Golf, Golf Alltrack, Golf GTI, Golf R, Golf SportWagen, Jetta, and Passat.
It includes powertrain coverage for engines, transmissions, and all-wheel-drive systems.
On the day the carmaker announced its new, longer warranty it also announced in Germany that the bill for its diesel cheating scandal will be higher than the last estimate. The company said it would take another $2.9 billion charge to earnings, explaining that it cost more than expected to fix affected cars.