Hi Josh,
You may not remember me, but we met a couple years ago at the DVKK Strip Show (2007)...I'm from Calgary.
Anyway, based on my considerable tow bar experience, I would not recommend a bungy on the steering wheel...the front wheels really need to follow "freely" as you turn corners.
You're right about not backing up if you can avoid it, especially with dropped spindles

I've use my Passat to tow my race Beetle on trips of up to 400 miles at a steady 105-110 kph with the cruise control (Calgary-to-Edmonton return trip), etc.
What car are you bringing home?