VW will offer buybacks on 475,000 diesel cars.
Volkswagen is settling charges that it rigged 475,000 diesel vehicles to cover up the fact that they don’t meet U.S. emissions standards. The $14.7 billion settlement includes about $10 billion that, according to federal regulators, will be used to compensate owners and get the faulty vehicles off the road.
When will payments begin and who qualifies for compensation and the planned buyback? Can owners keep their vehicles if they prefer? Here’s what you’ll need to know:
What did VW agree to and why?
The agreement settles claims that VW used a so-called “defeat device” that was programmed to detect when one of its diesels was undergoing emissions tests and reduce the amount of particulates and smog-causing oxides of nitrogen it produced. Otherwise, the vehicles could make up to 40 times more than the rules allow.
What vehicles are covered by the agreement?
The 2014 Golf TDI is covered by the deal.
All told, about 475,000 vehicles are involved in the settlement, 460,000 of them sold by the Volkswagen brand and another 15,000 Audi models. These include the 2013 to 2015 VW Beetle, 2010 to 2015 VW Golf, 2009 to 2015 VW Jetta, 2012 to 2015 VW Passat and 2010-13 and 2015 Audi A3. (There was no 2014 Audi A3 model.)
(US officials announce the diesel deal with VW. Click Here for more.)
What about VW, Audi and Porsche models equipped with the 3.0-liter turbodiesel?
Volkswagen acknowledges it also rigged that bigger engine but a settlement for that issue is still in the works and isn’t expected to be completed for several more months. Terms of the agreement may be similar to those for the smaller diesel engine announced this week.
What sort of payments are involved?
Owners could receive two forms of compensation. To start with, there will be a “diminished value” payment ranging from $5,100 to $10,000. Then, VW will offer additional cash to buy back those vehicles covered by the settlement.
How will the buyback be determined?
The price will be based on the “Clean Trade in Value” quoted by the NADA Used Car Guide for September 2015. That reflects the price of a vehicle before the diesel emissions scam was revealed. Since then, used VW diesel prices have dropped an average 19%. The buyback prices range from $12,500 to $44,000.
But what if I want to keep my vehicle?
The Audi A3 is covered, but not models like the A7 with the VW 3.0-liter turbodiesel.
The goal of the settlement is to get at least 85% of the defective diesels off the road, scrapped and recycled. That implies some owners would prefer to keep their VW and Audi diesels and just take the diminished value compensation. The automaker is still working on a fix for the problem that might involve software or hardware changes, or both.
(German authorities investigating role of former VW CEO Winterkorn. Click Here for the latest.)
Will it affect mileage or the way my car performs?
VW promoted its diesel models as clean, quick and fuel-efficient. The first goal of the fix will be bringing emissions into compliance with U.S. law. It is uncertain whether it will also find a way to retain the original mileage and performance it promised, however. Some models may not be repairable.
What about those who leased a VW diesel or already sold the car?
The settlement covers both those who leased and those who bought a diesel model outright. And there will be compensation for prior owners who sold the vehicle after the subterfuge was revealed on September 18, 2015. But they will split the payout with the current owner. Those who sold the vehicle before September 18th are not eligible.
Can I contact VW to get my compensation payment now?
You can find out more at website VWCourtSettlement.com. But don’t expect an immediate payout. The settlement document says that, “The earliest possible time for payments to begin is October 2016.” For one thing, there will be a required period for public comment before the deal with the EPA, Federal Trade Commission, U.S. Justice Department and the California Air Resources Board is finalized.
What about the buyback program?
VW plans to begin notifying owners immediately after the deal is finalized. It will have to complete any buyback within 90 days after an owner accepts the offer.
(VW could still face criminal charges, $10s of billions in additional compensation costs. Click Here for the story.)
Do I have to stop driving my VW or Audi diesel until then?
No. The deal allows owners to continue using their vehicles until they either complete a buyback or have the necessary emissions repairs made.
(This story first appeared on NBCNews.com.)