The U.S government announced a settlement with Volkswagen on Tuesday regarding the automakers massive emissions scandal first revealed in September 2015. The $14.7 billion settlement is the largest automotive industry settlement agreement ever made and will be used to compensate owners for the reduction in their car value and buyback or repair the faulty vehicles. $10 billion will be used to compensate owners and $4.7 billion to contribute to an environmental remediation fund and zero-emission vehicle technology research.
The agreement settles claims that Volkswagen used a “defeat device” to reduce the amount of smog causing oxides of nitrogen produced during emissions testing. Without the device, the vehicles produce as much as 40 times the level the test allows. Nearly 475,000 vehicles are involved in the settlement, about 460,000 of which are VW and 15,000 Audi. The vehicles included are the 2013-2015 VW Beetle, 2010-2015 VW Golf, 2009-2015 VW Jetta, 2012-2015 Passat, and the 2010-2015 Audi A3.
As proposed in the settlement, owners of these vehicles could receive two forms of compensation. There will be a “diminished value” payment made to owners, ranging from $5,100 to $10,000. Owners who sold their vehicle after September 18, 2015, the announcement date the emissions scandal, will split compensation with the current owner of the vehicle. Volkswagen will also offer additional money to buy back the vehicles included in the settlement. The price for buying back a vehicle will be quoted using the NADA “Clean Trade in Value” Guide for September 2015. It is estimated the effected vehicle values have dropped 19 percent since then. The buyback price ranges from $12,500 to $44,000. The goal of the buyback settlement is to remove as much or more than 85% of the faulty vehicles off the road.
It is recognized that some owners may want to continue driving their vehicle. Vehicle repair will also be an option for owners, however it is not yet known if the repair will alter the fuel efficiency and car performance owners were originally promised when buying the car. Reduction of the high level of nitrogen emissions will be the first priority of the repair.
Owners can expect payouts to begin as early as October 2016, and will be notified about the buyback program immediately after the deal is finalized. Until that time, owners may continue driving their effected vehicles without penalty or disqualification from the settlement. If you wish to learn more about the Volkswagen emissions scandal settlement, you may contact Louisville, KY auto product liability lawyer Tad Thomas of Thomas Law Offices for more information.