The Cheap Mk IV R32 Is Dead. Long Live the R32

Twenty years after it debuted, the hatchback that defined the template for the top-dog Golf in the U.S. is no longer cheap. VW's Mk IV R32 is, more clearly than ever, a bonafide collector car. Even in a market that continues to cool, this all-wheel-drive hatch is red hot, forging its place in the pantheon of 2000s classics.

A lot has happened since 2004, the only model year that VW offered this über-Golf in the United States. To refresh your memory: That year, Mark Zuckerberg launched TheFacebook.com. Shrek 2 landed in theaters. The Spirit and Opportunity rovers landed on Mars. And Volkswagen allocated 5000 examples of the hottest hatchback it had ever made to the United States.

Stateside car enthusiasts already knew how much fun a VW hot hatch could be. In 1983, we met the Mk I Rabbit GTI, a 90-hp, four-cylinder featherweight that put a grin on your face every time you tossed it down a curvy road. Enthusiasts fell in love with the GTI for the quality of its steering, the balance of its chassis, and its understated practicality.

As of its fourth generation, which arrived in the U.S. for the 1999 model year, the sportiest Golfs had grown bloated. VW compensated for the increased heft and size with more power, including a 174-hp, VR6-powered model called the GLX, but reviews were scathing: Car and Driver wrote that the GLX "leaned in corners like a torpedoed frigate," and declared the howling from its sidewalls "a defilement of the memory of the original hot-hatch Rabbit." The 2.0-liter, turbocharged four-cylinder GLS that VW added for 2000 wasn't any more aggressive.

With the R32, Volkswagen finally got the recipe right for a more substantial Mk IV. VW didn't simply add power: It added an all-wheel-drive system derived from another Volkswagen Group product, the TT 3.2 quattro, lowered the suspension by an inch, and added huge, 13.1-inch front brakes. Like the GLX, the R32 was powered by a naturally aspirated VR6, VW's narrow-angle V-6, but in the R32 it was enlarged to 3.2 liters, the largest displacement for any production Golf to date. Tuned to 240 hp, the VR6 in U.S.-market cars was backed exclusively by a six-speed manual. (European market cars got a dual-clutch automatic, the first of any production car.) Aluminum pedals, König sport seats, a dual exhaust, and a set of 18-inch, 15-spoke alloy wheels ensured that the car felt, looked, and sounded like something special. The front suspension bushings and spindles borrowed from the TT brought the handling in line with the expectations set by the original GTI: Car and Driver called the R32 "the funnest 'Audi' VW has ever sold."

Though it was not the most powerful of the cheap, fun competition, the R32 set itself apart in restraint and maturity. Unlike the competition from Mitsubishi, Subaru, and Honda, the sportiest Golf wore neither wing nor scoop. A three-letter badge or a stripe of red had been sufficient for the GTI, and the R32 was extreme only by the restrained standards of the Germans: With a gaping lower air dam, badges for the grille and trunk, and darkened taillights above a dual exhaust, it radiated a quiet confidence. 20 years later, the softly flared fenders and chunky door handles communicate that same maturity, dipped in 2000s nostalgia.

That nostalgia, coupled with attrition and low production numbers, is a huge reason behind the skyrocketing prices of the R32. These cars were so fun to drive that many people did just that, without regard to the rock chips or wheel rash or fender-benders that cause today's most discerning R32 collectors to recoil. As of 2020, the average mileage of all R32s offered on Bring a Trailer was over 73,000, with many closing in on 150,000 miles. Because immaculate R32s are hard to find, the best examples have sold for increasingly eye-watering prices: $65,100 for an 1800-mile car in August of 2020, $61,950 for a 20,000-mile example in November of 2021, then $104,000 for a 97-mile one in February of 2023.

One hundred grand?

For a 97-mile car with a shower cap still on the steering wheel, yes. The best-condition cars (#1 and #2) have appreciated at a more aggressive rate than their driver-quality (#3 and #4) siblings. This bears out a pattern we've observed in the entire collector-car market: The value gap between the best-condition cars and the less-perfect rest is widening, in large part because it's getting more expensive to bring a lesser-condition car up to snuff.

Values for the R32 peaked in the summer of 2023, even as the market continued to fall from its 2021 heights: In July, the Hagerty Market Rating, which evaluates the activity of the broader collector-car market, posted its largest single-month drop in over three years. The R32 cared not: The value of a #2 (Excellent) condition example jumped from $35K in April of 2023 to $54,600 in July. As of this writing, values for #1 and #2 cars have found a new normal, with average values remaining stable at $73,300 and $54,600. #3 and #4 condition cars retreated $3000 and $2300, respectively, from July to October of last year, though as of January, 2024, those figures are holding steady.

The divergence of values between the best cars and the rest has a silver lining: Well-worn examples have not appreciated as much as their low-mile brethren. If you're willing to show some TLC to an example that is rough around the edges, you can still find an R32 in the $20K range, and even a #3 (Good) condition car with minimal needs sits at 30 grand. Our suggestion, for R32 fans on a budget? Don't chase perfection: Invest enough in the car to make it the delightful driver it is, shop freely from the catalog of standard Golf and VW Group parts (only a few interior trim pieces are unique to the R32), and have fun. And, not to take away from this exclusive hatch, but there is always the Audi TT 3.2 Quattro, which fields the same driveline, albeit in a different tune; it's available for far less.

Enthusiasts are lining up to realize their dreams of the early 2000s: Quote counts for the R32 are steadily increasing. Buyer demographics skew heavily to the generations that coveted them when new, or to young buyers who look back at them with reverence: Gen X and younger account for 88.9 percent of the interest of these cars. (For context, these buyers represent 63 percent of the broader collector-car market.) Never mind the fact that TT 3.2 Quattro has a similar driveline and costs less: There is a special something about this 2000s hatchback.

Coveted by a young demographic, and riding a wave of 2000s nostalgia, the R32 isn't looking like it will get cheaper. The days of the perfect, $30K R32 are gone; but VW's hottest Mk IV hatch is here to stay.

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