For owners and lessees of 3.0-liter V-6 TDI-equipped Volkswagen vehicles affected by a huge diesel emissions scandal, the wait for compensation appears to be nearing an end. In a settlement filed in California federal court, Volkswagen has agreed to a $1.2 billion payout to those who bought or leased about 78,000 affected cars and crossovers.
A similar, $14.7 billion settlement involving 475,000 2.0-liter four-cylinder TDI-equipped cars was filed in June. Since October, the German automaker has been giving out cash payments in addition to offering to buy back, terminate leases, or fix the cars. Payments are based on the car’s age. In buying them back, Volkswagen has been using trade-in values frozen in September 2015, when the German automaker first admitted to using “defeat devices” to trick U.S. emissions tests.
The settlement for 3.0-liter TDI vehicles is similar except that the owners of newer vehicles may not have the option to sell their cars back to the automaker, because Volkswagen could offer a fix that satisfies U.S. regulators.
The settlement for 3.0-liter TDIs is divided into Generation 1 and Generation 2 vehicles, because of different engine designs. Generation 1 includes 2009–2012 Volkswagen Touaregs and Audi Q7s, while Generation 2 includes 2013–2016 Touaregs; 2013–2015 Q7s; 2014–2016 Audi A6, A7, A8, A8L and Q5s; and 2013–2016 Porsche Cayenne diesels.
For the Generation 2 vehicles, government regulators are giving Volkswagen the opportunity to repair the cars and crossovers so that they are fully compliant with emissions requirements. In a conference call with media, the attorney for plaintiffs in the class-action suit, Elizabeth Cabraser, said that if the Generation 2 vehicles can be fixed to deliver their promised performance and emissions, it would minimize the scrapping and junking process that stems from taking back tens of thousands of vehicles.
Also, Cabraser said that if a repair is approved the affected owners will not have to wait to get paid. They can receive half of the cash payments upfront, and the other half once the vehicle is repaired. The range of cash compensation for Generation 1 vehicles is from $7755 to $13,880, while for Generation 2 it’s $7039 to $16,114.
If no fix is approved, Volkswagen will be required to buy back the Generation 2 vehicles. If regulators sign off on a repair, Volkswagen would have to fix all the vehicles by deadlines detailed in the settlement or would be subject to fines of up to $4 billion.
A court hearing is set for February 14, and if the settlement is approved, Volkswagen could begin the settlement program in May at the earliest.
Meanwhile, VW supplier Bosch has separately agreed to pay out $325.7 million to affected owners and lessees of both 3.0-liter and 2.0-liter TDI vehicles; the supplier provided the defeat devices that tricked emissions tests. Cabraser said owners of all affected Volkswagens will get payments ranging from $350 to $1500 from this separate settlement.
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