Class Action: Volkswagen Illegally Sold Pre-Production Cars, Lied About Used Cars’ History

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A proposed class action filed in Virginia claims Volkswagen illegally sold pre-production cars that failed to meet federal safety standards and lied about used vehicles that had been driven extensively by employees and members of the press prior to being titled. The lawsuit alleges that the German automaker falsified certain Volkswagen- and Audi-branded vehicles’ Carfax reports and misrepresented their certifications, mileage, and prior use in order to sell the cars at higher prices.

The complaint specifies three categories of so-called “certified pre-owned” vehicles that were allegedly deceptively advertised and sold. The first category, the case says, includes pre-production cars, also known as pre-series or zero series, that are one level up from prototypes and cannot legally be sold in the United States due to the substantial differences between pre-production and certified production-level vehicles. According to the suit, pre-production vehicles, which are essentially marketing tools used in auto shows and displays, are many times built with “a hodge-podge of whatever components might be available on the manufacturing floor” and are too different from series-production models to fall under the same safety certifications. These pre-production vehicles are “essentially worthless,” the suit says, as they cannot be legally driven or sold in the United States.

The second group of vehicles targeted in the lawsuit is made up of corporate fleet vehicles that Volkswagen allegedly sold to the public without disclosing that the cars had previously been loaned to various members of the automotive press for testing and review. The case claims these cars are “significantly less valuable” than similar vehicles because they were driven by journalists who were encouraged to push the cars as far as they could go in order to generate positive media attention.

“Press-Fleet Cars take some of the worst abuse and are some of the hardest-driven cars in existence,” the case states, noting that because the vehicles are loaned to various members of the press for only a short time – usually seven days on average – the drivers subject them to rough treatment without having to worry about the financial consequences.

Thirdly, the case targets “pool-fleet” cars that were allegedly part of a pool of vehicles loaned to Volkswagen employees for their personal use before being leased to a particular employee. The case claims press-fleet and pool-fleet cars were deceptively marketed as “CARFAX 1-Owner” vehicles and sold at a premium price even though Volkswagen knew they were driven by “a myriad of other individuals” prior to being titled.

According to the case, Volkswagen allowed these vehicles to be operated on manufacturer-issued license plates and driven thousands of miles before they were titled and registered, while representing to buyers that the miles occurred after the initial titling. Coupled with the allegedly false one-owner CARFAX reports, these misrepresentations led customers to believe the cars had seen minimal use and were worth more than they really were, the suit says.

Finally, the lawsuit takes issue with a safety recall initiated by Volkswagen in 2018 in which the automaker allegedly falsely claimed a simple oversight in its IT system allowed 252 pre-production cars to be sold to the public. The case alleges the recall was a misleading attempt by Volkswagen to cover its tracks and hide that it had knowingly sold pre-production cars as far back as 2011 at the direction of top executives.