Is this a gas or diesel motor in the Passat? If it is a gas motor, conventional oil should be OK. Just figure to change the oil about every 5K miles. Synthetic oil is always better, and it sounds like the drving pattern for the car is mostly "town - stop and go" driving which is tougher on the oil. $100 for an oil change is very steep. If you want to use full synthetic you can buy it at Walmart and do the oil change yourself. Or, price full synthetic oil changes at several other shops for future changes.
Conventional oil in the car now won't hurt anything at all. Just get it changed out on schedule at 5K or so miles. If the mfg'r is recommending full synthetic AND 10K oil change intervals, the conventional oil isn't going to be good for the car when it has 10K miles on the oil.