FRANCISCO — Volkswagen diesel owners can choose to
either sell their car back to the company or get a repair
that could diminish the vehicle's performance under a
settlement of claims tied to the German automaker's
settlement will cost VW $14.7 billion, a person briefed on
the settlement talks said Monday, but does not resolve all
the legal issues stemming from its admission that nearly a
half million vehicles with 2-liter diesel engines were
programmed to turn on emissions controls during government
lab tests and turn them off while on the road.
figure represents the largest auto scandal settlement in
U.S. history. The deal sets aside $10 billion to repair or
buy back roughly 475,000 polluting Volkswagen vehicles.
Whether they choose to have BW buy back their vehicle or
repair it, they will receive a payment of $5,100 to
$10,000, the person said. The person asked not to be
identified because the deal will not be filed in court
until Tuesday, and a judge has ordered attorneys not to
talk about it before then.
would repair the vehicles to bring them into compliance
with clean air laws has not yet been finalized, the person
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.
will also offer to fix the cars for free, but any repair
that improves the pollution controls will likely hurt the
cars' acceleration and fuel economy. Volkswagen marketed
the cars as both more fuel efficient and better performing
that those with regular gasoline engines.
settlement still requires a judge's approval before it can
go into effect. Owners can choose to decline Volkswagen's
offer and sue the company on their own.
settlement also includes $2.7 billion for environmental
mitigation and another $2 billion for research on
zero-emissions technology, the person said.
Marron, a banker from Allentown, Pennsylvania, who owns a
2012 Jetta SportWagen diesel, said he's glad Volkswagen is
offering more compensation than earlier reports had
suggested. But Marron wants assurance that if Volkswagen
fixes his car but he doesn't like the way it performs, the
company will still buy it back. And if he keeps his car
and saves Volkswagen money, he wants compensation for
this moment, I don't know anything more than I did a
couple of months ago," he said.
scandal erupted in September when it was learned that the
German 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 in humans. Car owners and the
U.S. Department of Justice sued.
still facing billions more in fines and penalties, a
lawsuit by state attorneys general and potential criminal
billion settlement also does not include another roughly
90,000 3-liter Volkswagen diesels, which had another
version of cheating software.
April took an $18.2 billion charge to cover the cost of
the global scandal, which includes a total of 11 million
company has admitted developing sophisticated software
that determined when the cars were being tested by the EPA
on a treadmill-like device called a dynamometer and turned
on the pollution controls. Once all wheels began spinning
and the steering wheel was turned, the controls were
company, which knew the EPA's testing routine, got away
with the scam for seven years before being caught by the
International Council on Clean Transportation, which hired
West Virginia University to test a VW in real roads