VW may buy back or repair vehicles
SAN FRANCISCO — Volkswagen would repair or buy back polluting diesel vehicles and pay each owner as much as $10,000 under a $14.7 billion deal the car maker has reached to settle lawsuits stemming from its emissions cheating scandal, a person briefed on the settlement talks said Monday.
The figure would be the largest auto scandal settlement in U.S. history and a huge step in Volkswagen’s efforts to address the legal fallout from its admission that its vehicles were designed to fool emissions tests.
The deal sets aside $10 billion to repair or buy back roughly 475,000 polluting Volkswagen vehicles with 2-liter diesel engines, and to compensate each owner with an additional payment of between $5,100 and $10,000, the person said.
How VW would repair the vehicles to bring them into compliance with clean air laws has not yet been finalized, the person said.
Owners who choose to have VW buy back their cars would get the clean trade-in value from before the scandal became public on Sept. 18, 2015. The average value of a VW diesel has dropped 19 percent since just before the scandal began. In August of 2015, the average was $13,196, and this May it was $10,674, according to Kelley Blue Book.
The settlement still requires a judge’s approval. Owners can choose to decline Volkswagen’s offer and sue the company.
The settlement also includes $2.7 billion for environmental mitigation and another $2 billion for research on zero-emissions technology.
The scandal erupted when it was learned that the automaker had fitted many of its cars with software to fool emissions tests and had put dirty vehicles on the road. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems. Car owners and the U.S. Department of Justice sued.
VW is still facing billions more in fines and penalties, a lawsuit by state attorneys general and potential criminal charges.
The $14.7 billion settlement also does not include another roughly 90,000 3-liter Volkswagen diesels, which had another version of cheating software.
