The $600 Blunder
Alex Rudloff found out the hard way. Some time ago, Rudloff – an AOL executive living just south of Cocoa Beach, Florida – lost both sets of keys for his 2008 Volkswagen Passat sedan. The VW dealership in neighboring Melbourne told Rudloff that he'd have to transport the car to the store, where a technician could program a replacement key to work with the car's onboard computer.
That proved to be a difficult task. Alex purchased an un-programmed spare key that was supposed to let him shift the transmission into neutral. It didn't work. Then he tried to slide a dolly under the wheels, so that a tow truck could take it to the dealership. But the car was parked too close to the garage's right wall, and he couldn't get the dolly into position. Finally, the tow truck operator located the Passat's shift override, a yellow button under the shifter. He put it in neutral, dragged it onto the flatbed and took it to the dealership. Adding up the cost of the key, the programming and the tow truck, "it was a $600 mistake," Rudloff says ruefully.
The high cost of replacement keys attracted the attention of Weiss & Lurie, a Los Angeles law firm that filed a class-action lawsuit against VW. In 2008, VW settled the suit after it authorized independent repair shops to sell replacements. However, the settlement hasn't had much impact on the cost of keys sold by VW or any other carmaker. Prestige Volkswagen in Melbourne tells me that it charges $156 for a replacement key and $105 to program it.
We did some comparison-shopping, phoning German Concepts, a used-car dealership in Osceola, Indiana that is one of 37 independent stores authorized by Volkswagen to replace keys. We were told that they charge $260 for the key and programming -- virtually identical to the price charged by Rudloff's Florida dealership.
It's not just Volkswagen that charges an arm and a leg for its smart keys. Porsche dealers charge $380 to replace and reprogram a key for the Cayman, and even a mass-market brand like Ford will charge $85 for a Fiesta key plus $85 for the programming. "It's a monopoly, and there's nothing you can do about it," says Jesse Toprak, an industry analyst with the consumer website TrueCar.com, who once coughed up $380 to get a replacement key for his Mercedes SLK.
Some automakers do allow independent repair shops to issue replacement keys. For example, independent locksmiths can replace Toyota keys if they purchase key coding equipment and pay a monthly fee. But there aren't enough locksmiths in the car key replacement business to create competition, said Clarence Ditlow, one-time executive director (now deceased) of the Center for Auto Safety, the Washington, D.C.-based consumer advocacy group. In 2006, the center surveyed 50 models and found that the average dealer price of a smart key was more than $150. The center unsuccessfully petitioned the Federal Trade Commission to probe the auto industry's key replacement policies.
For security reasons, automakers don't want to turn over their key code software to any locksmith that asks. "You could be giving it to a thief," Ditlow acknowledged. But he said automakers could create a secure nationwide key code storage system that would allow authorized locksmiths to use VIN numbers to look up key codes.
"You don't have to license every shop. You would license just enough locksmiths and shops to create competition to lower prices," Ditlow noted. Maybe so, but today there doesn't appear to be a reliable source of cheap smart keys. To be sure, you can find a motley assortment of keys on eBay, that paragon of online capitalism. Recently, someone in Arizona was auctioning a Toyota Prius smart key, which (if new) would cost $195.
So let's assume you got a nice discount on that eBay key. The folks at Dunning Toyota in Ann Arbor, Mich., told me they were willing to reprogram it for $100. But they warned me that it was a crapshoot -- sometimes those used keys can't be reprogrammed.
Right now, the best consumer advice is this: Don't lose your keys. Rudloff , the Passat owner, says he's learned his lesson. "We bought three new keys, and we put one in a safe," he said. "Keys are getting too fancy. Let's leave it at that."
More on Autoblog