CLIFF LEPPKE'S CYBER SEAT

VW’s Massive Settlement:  VW Will Pay 2.0-Liter Diesel Owners Up To $10 Billion; Must Shell Out $15 Billion in Largest U.S. Automotive Civil Suit

Volkswagen agrees to pay up to $10 billion to buy back cars and compensate U.S. vehicle owners and lessees in largest civil settlement in U.S. automobile history.  The carmaker will also pay nearly $5 billion in environmental reparations.  The automaker also reached a separate settlement with 44 U.S. states that will cost $600 million.  Car models involved include VW 2.0-liter TDI diesel Jettas, Beetles, Golfs, Passats and Audi A3s.  Model years span from 2009 through 2015.

VW will begin its settlement program this fall after U.S. District Court Judge Charles Breyer grants final approval of several agreements.  Preliminary approval of the proposed class settlement is scheduled for July 26, 2016.  Individuals who own or lease affected vehicles need not contact VW or their dealers at this time.  After the preliminary settlement is reached, affected TDI owners will receive notification of their rights and options.

Those who owned an affected VW/Audi model as of September 18, 2015 are eligible.  Anyone who sold an affected car after September 18, 2015 will split the compensation 50-50 with the buyer.  If the TDI was sold before Sept. 18, 2015, the owner is not eligible.    

If implemented, VW’s big deal, which the FTC says is fair, will commence with a buyback program.  Each owner of an eligible TDI will get the vehicle value: the pre-scandal repurchase price of their vehicle based on the Clean Trade-In Value published in the September 2015 NADA Used Car Guide.  There will be adjustments for options and mileage.  Plus, TDI owners will receive $5,100 to $10,000 owner restitution depending model and year.  This amount is 20-percent of vehicle value plus $2,986.73.  Expected buyback compensation ranges from $12,500 to $44,000.  Lessees, who terminate leases early, will receive about half of what an eligible owner would receive.  Owners with loans that exceed their vehicle’s value may get loan forgiveness.    

EPA Administrator Gina McCarthy says she’s pleased, “we’re getting VW’s vehicles off the road, reducing harmful pollution...that never should have been emitted.

Two Choices:  VW Buyback or Wait for an Approved Vehicle Modification

The initial thrust of VW’s settlement for 2.0-liter TDI drivers is a buyback program.  This removes its dirty diesels from American highways; lets those who believed they’ve been duped by VW get rid of their vehicles.  What VW will do with these machines isn’t stated.  Second, VW might, if it develops an approved modification for its 2.0-liter TDI engines, let customers choose to have their vehicles modified free of charge and keep them.  These owners will also receive a restitution payment from VW.  TDI owners may have until the fall of 2018 to decide which option they prefer.  Due to the lengthy process for approving emissions modification, a final settlement involving a fix may not be available until May 1, 2018.  If no modification is available by May 1, 2018, owners have until June 1, 2018 to accept a buyback or opt to be excluded from the class action suit.

See:  vwcourtsettlement.com for details.

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