Details on exactly how Volkswagen will pay back customers and the U.S. government over its diesel emissions scandal have been finalized.
To settle with owners, Volkswagen has put together a pool of $10.033 billion to cover the cost of buybacks, emissions fixes and cash settlements. The brand has also agreed to pay the US government $2.7 billion for environmental mitigation costs and another $2 billion is being spent on research into zero-emissions vehicles.
That brings the total cost of Volkswagen’s diesel scandal in the US to $14.7 billion. This is also the largest consumer auto industry class action settlement in U.S. history.
In September of 2015, it was discovered that Volkswagen has installed a defeat device in many of its diesel vehicles, allowing its cars to pass emissions tests while spewing illegal levels of pollution into the air.
Owners of Volkswagen or Audi vehicles equipped with the 2.0-liter diesel engine will have two options: A buyback of the car for the price it was worth in September 2015 (before the scandal broke) or Volkswagen will fix the car.
VW is still trying to come up with an emissions modification process that is approved by both the EPA and CARB for these cars, though if a solution is not found, the buyback program will still be available. Some owners will be able to cancel leases without penalties while some car loan obligations will also be waved.
Regardless of whether the owner chooses the buyback or the fix, Volkswagen will also be sending a cash settlement. VW says that most owners will receive between $5,100 and $10,000 each, based on a formula which probably depends on how long the vehicle has been owned.
'This historic agreement holds Volkswagen accountable for its betrayal of consumer trust, and requires Volkswagen to repair the environmental damage it caused,' said Elizabeth Cabraser, Court-appointed Lead Counsel and chair of the 21 member Plaintiffs’ Steering Committee (PSC), which negotiated the settlement on behalf of class members. 'To achieve relief for consumers so swiftly on such a large scale is unprecedented.'
Read more about the VW Diesel Owners Get up to $10K Each, Total Bill Hits $14.7B at AutoGuide.com.