Judge Approves Volkswagen Settlement; German Automaker Will Pay $14.7 Billion to Consumers

Volkswagen Scandal: Judge Approves $14.7B Settlement

More than a year has passed since Volkswagen’s emission cheating scandal came to light in September 2015, yet the majority of affected polluting diesels are still on the road today.  The German automaker took a step forward over the summer, agreeing to a $14.7 billion settlement with owners of their 2-liter diesel engines in the United States—who they have admitted to intentionally swindling. The settlement—one of the largest in automobile history—was approved on Tuesday by U.S. District Judge Charles Breyer in a California courthouse after he intimated the deal would be accepted as far back as July.

Judge Breyer said that the settlement took five months of intense negotiations to reach and “provides benefits much sooner than if litigation were to continue.” He also claimed that accepting the deal now would stop “additional environmental damage.” The agreement includes 475,000 of Volkswagen’s vehicles, but less than 350,000 have registered so far and 3,300 have opted out entirely. The deal covers 2-liter diesel engine cars including VW’s Beetle, Golf, Jetta, Passat and Audi’s A3 that are from model years 2009 to 2015. Owners will have the option of selling their cars back to VW for the full trade-in value, regardless of condition, or they can receive free repairs.

As part of the settlement Volkswagen has devoted $10.03 billion to purchase or fix the affected automobiles at VW dealerships starting next month and they have hired 900 employees to handle the operation. On top of the buyback program, the settlement includes a payment of $5,100 – $10,000 to the majority of owners who bought their car before the scandal was announced last fall.

The agreement also stipulates that VW, the second largest automaker on the planet behind Toyota, set aside $2.7 billion to help mitigate the environmental damage done by their emission cheating vehicles and $2 billion to promote zero-emission options. More than $300 million will be going to attorney’s fees. Elizabeth Cabraser, a lawyer representing the U.S. consumers, said that the settlement “holds Volkswagen accountable for its illegal behavior and breach of consumer trust.”

“Defeat Devices” Were Installed

After the U.S. authorities discovered the “defeat devices” installed in VW’s last year, which deceived emissions regulators and enabled VW’s cars to pollute allegedly up to 40X the legal limit, other countries realized that the problem was not confined to the United States. Internationally, VW admitted that 11 million vehicles had software programmed to mislead emission authorities, around 600,000 in the U.S.  Eventually, the scandal led to the departure of Volkswagen Group of America, Inc. CEO, Michael Horn. The man who took his job, Hinrich J. Woebcken, said that the “settlement is an important milestone in our journey to making things right in the United States.”

As laid out in the deal, owners of affected Volkswagen 2-liter diesel engines will have until September 2018 to decide what they want to do with their cars and VW will face additional fines if 85% of the vehicles are not off the road or fixed by June 2019. In addition, the settlement does not include the 85,000 Porsche, Audi and Volkswagen 3-liter diesel engines that also contained the “defeat device.” VW is back in court over these vehicles next week and are also facing sixteen lawsuits from states in the U.S. as well as fines up to $46 billion from the Justice Department for breaking clean air laws.

To see if your Volkswagen is affected see: https://www.vwcourtsettlement.com/en/