As part of a record $15 billion settlement, owners and lessees of most Volkswagen (VLKAY) diesel-powered vehicles will see some monetary relief. The agreement, the largest auto-related class-action settlement in U.S. history, is designed to provide choice and flexibility to about 475,000 owners of VW vehicles that were engineered to cheat government emissions tests. Every owner or lessee of the cars covered by the agreement will receive cash compensation, as well as the option of either selling their vehicles back to VW or using the automaker's yet-to-be-unveiled emissions fix. The settlement may provide a measure of relief to VW owners, who have expressed concern about not only the value of their cars but ongoing emissions issues. Many customers had been drawn to the carmaker's image of "clean diesel" and felt betrayed after researchers uncovered the emissions cheat last year. Under the agreement, VW will buy back the vehicles at their pre-scandal valuations.
The settlement is "designed to achieve not only economic justice for consumers, but justice for the environment," said Elizabeth Cabraser, court-appointed lead counsel for the consumer plaintiffs, on a conference call to discuss the agreement. "This is meant to be a consumer-friendly, simple, expedited process." The details of the settlement are at VWcourtsettlement.com, where owners and lessees can keep on eye on developments in the agreement, Cabraser said. The next steps involve a preliminary approval from the court, scheduled for July 26, with the buybacks, fixes and cash payments likely beginning this fall.
The German automaker will pay about $10 billion to either buy back or repair the vehicles. It also will pay $2.7 billion for environmental mitigation and another $2 billion for research on zero-emissions vehicles. Here's the basic framework of the settlement: Which cars are covered? The settlement applies to vehicles with 2-liter TDI engines vehicles. The makes and models that are covered are: VW Beetles from 2013-2015; VW Golfs from 2010-2015; VW Jettas from 2009-2015; VW Passats from 2012-2015; and Audi A3s from 2010-2013 and 2015. Which cars aren't covered? Separate settlement talks are ongoing involving VW vehicles with 3-liter TDI engines, so those cars aren't covered. Cabraser said these vehicles are mostly Audis and Porsches.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
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