Settlements to car owners, the federal government, as well as some states has finally been decided, in regards to Volkswagen’s emission rules scandal. It is said that the settlements will cost the automaker over $15 billion dollars, when all is said and done.
Auto News United States officials announced on June 28th, that the settlements include approximately $10 billion for early lease terminations, client buybacks, and restitution payments to customers.
After pressure from the EPA, Volkswagen admitted last fall, that it had its 2.0-liter diesels rigged with software to hide dangerous nitrogen oxide emissions while under U.S. testing. VW then revealed that this has happened since 2009, with over 500,000 cars affected. VW later added that about 11 million cars around the globe also had this rigged software, creating a car controversy that caused the company’s stock price to plummet, with a huge backlash of negative press and views from regulators, clients, dealers, and shareholders.
It is being said that every VW car owner that has an affected diesel will receive the repurchase price of their car, plus, depending on the year and model of the car, an additional $5,100-$10,000. Total compensation from this buyback option ranges from $44,000 to $12,500.
Eligible car owners can also hold off to see if the company comes up with a repair option for the diesel engines, which will be regulator-approved. Regardless, owners choosing this option will also receive an additional payout of $5,100-$10,000.
Those who terminate their leases will get around half of what an eligible owner would get for the same care. In addition, for those car owners that currently have loans on their cars that are higher than the buyback payment, and select this option, they may be able to be approved for loan forgiveness.
Additionally, according to the summary, the company is said to be placing a $2.7 billion dollars in a trust, that will be given to a variety of national environmental programs that look to decrease the emissions of nitrogen oxide. Volkswagen is also obligated to take $2 billion to promote the battery-electric or hydrogen fuel cell car market; which is added onto the amount the company has already put aside to invest in alternative-fuel technologies.
Separate to the above, VW reached a settlement with about 44 states within the U.S., as well as Puerto Rico and the District of Columbia, that will cost the company an additional $600 million.
These settlements have finally come to fruition, after many months of negotiations between Volkswagen, U.S. officials, and attorneys representing those who own VW cars with affected diesels.