Volkswagen’s Emissions Practices Expose Dealerships to Losses

Paulson & Nace, PLLC and a national consortium of prominent trial attorneys are working together to investigate claims that auto dealers may have against Volkswagen Automotive Group (VWAG) related to the emissions scandal that Volkswagen has recently acknowledged.

Paulson & Nace, PLLC and a national consortium of prominent trial attorneys are working together to investigate claims that auto dealers may have against Volkswagen Automotive Group (VWAG) related to the emissions scandal that Volkswagen has recently acknowledged.

The Claim

Numerous consumers have already filed lawsuits against Volkswagen for the deceptive practices of bypassing emissions testing that Volkswagen AG employed. In addition, used car dealers are left holding the bag because of Volkswagen’s deception. That is because there is a daily cost for holding pre-owned inventory on a used car lot and used cars lose their value while sitting on a used car lot for an extended period of time.

Most dealerships have a low threshold for adversity; liquidity and cash positions are affected very quickly. A dealership should not have any more money tied-up in inventory than is absolutely necessary. This is why dealers will sell vehicles to other dealers, even if they have to do so at a loss. Doing so eases cash considerations even though the vehicle did not make a profit. Excess inventory levels have negative consequences on cash flow and, consequently, on the ability to meet the cash demands of an ongoing business.

Because of Volkswagen’s Stop Sales Orders, used car dealers were forced to pull popular models from their lots and have not even had the opportunity to sell the vehicles subject to the stop sales order to the public, other dealers or auto auction houses. Thus, dealers’ money has been tied up in inventory with no chance of a foreseeable return. If “floor planned,” the dealers have carried interest and other costs associated with holding the cars during the pendency of the stop sales order. If the inventory was financed with cash, dealers are unable to realize a financial return on the cash tied up in the unsold Volkswagen inventory. Automotive auction houses have, likewise, been forced to carry expenses on vehicles subject to the Stop Sale Order. Finally, there is now a stigma associated with Volkswagen vehicles and the values of the vehicles have dropped. All of these damages have been caused by Volkswagen’s deceptive actions.

Legal Recourse

Over one-hundred consumer class actions have already been filed. However, relatively few cases have been filed by those dealers who have come to acknowledge the losses they will likely suffer. Most dealerships are biding their time to take legal action in the hopes that VWAG will “make it right” without the need for litigation. Holding out may soon limit some of the dealers’ avenues for full compensatory return.

More concerning is that dealerships may soon become the target of lawsuits by interested consumers. And questions of jurisdiction and venue may preclude certain defenses if dealerships don’t act quickly to protect their legal interests.

Paulson & Nace and consorted law firms believe there are viable claims that dealerships may bring against VWAG, and want to assist these dealerships in receiving full recovery of the damages they’ve sustained.

Paulson & Nace, PLLC offers creative strategies and comprehensive counsel to victims of deceptive trade practices. The firm primarily focuses on medical malpractice, personal injury, and consumer class action matters.

Contact Info:
Name: Jonathan Nace
Email: Send Email
Organization: Paulson & Nace, PLLC
Address: 1615 New Hampshire Ave NW, Washington, DC 20009
Phone: (202) 463-1999
Website: http://www.paulsonandnace.com

Release ID: 92537