It’s official: Volkswagen will begin the process of buying back thousands of vehicles equipped with “defeat devices” designed to skirt federal emission standards after a judge signed off on a proposed $15 billion settlement between the carmaker and federal regulators on Tuesday.
U.S. District Court Judge Charles Breyer called the agreement “fair, reasonable, and adequate” on Monday, despite VW’s failure to provide an adequate fix for the defective vehicles, the Associated Press reports.
According to the agreement [PDF], VW would pay a maximum of $10.03 billion to cover buybacks and fixes for the affected vehicles.
The settlement only covers about 475,000 vehicles in the U.S. that contain 2.0 liter diesel vehicles. It does not cover about 87,000 3.0 liter diesel engine vehicles, so you can expect a separate settlement to resolve cheating allegations in those cars.
Per the agreement, VW would remove from operation or modify at least 85% of the vehicles covered by the settlement.
To do so, the company will offer each eligible owner and lessee of an affected vehicle the option of a buyback and termination of the lease, or modification of the vehicle at no expense.
Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased.
The buyback and lease termination offers will be available to affected vehicle owners or lessees 15 days after the settlement has been approved, and will remain open for at least two years.
Additionally, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, a settlement with the Federal Trade Commission provides these consumers with an option to have their loans forgiven by Volkswagen.
Consumers who have third-party loans have the option of having Volkswagen pay off those loans, up to 130% of the amount a consumer would be entitled to under the buyback. For example, if the owner is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000.
Any vehicles bought back by VW are required to be fixed, scrapped, or recycled. The company is prohibited from shipping or moving the vehicles out of the U.S.
Tuesday’s order notes that, so far, 336,612 owners of 2-liter diesels have registered for the settlement and 3,298 have opted out, the Associated Press reports.
Eventually, customers will have also been given the option to have their vehicles modified once a fix was ironed out by the EPA and California Air Resources Board.
CARB has previously rejected two proposed fixes from VW related to both 2-liter and 3-liter vehicles, saying the plans were “incomplete, substantially deficient, and fall far short of meeting the legal requirements to return these vehicles to the claimed certified configuration.”
In addition to signaling the beginning of the buyback option, Tuesday’s settlement also requires VW to pay $2.7 billion for environmental mitigation and another $2 billion for clean-emissions infrastructure.
Judge approves Volkswagen’s $15-billion emissions settlement [The Associated Press]
by Ashlee Kieler via Consumerist
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