The first major step in resolving the massive VW dieselgate scandal has been taken.
Over seven months since the German automaker first revealed that it has been cheating on EPA diesel emissions tests, VW has agreed in principle on a settlement, taking the first major step in making things right.
Here are six things you need to know about the VW dieselgate settlement.
1. Customers Can Have Their Car Bought Back
Current owners of affected diesel vehicles will have the option for VW to purchase their car back. Unfortunately, financial details of the offer are still being finalized, so it’s unclear how much money VW will pay to purchase affected vehicles back from current owners.
2. Customers Can Have Their Car Fixed
If customers don’t want to sell their car back to Volkswagen, they will have the option to have it fixed. Again, details on how VW plans on fixing the affected vehicles have still not been released, but the German automaker has agreed in principle with the U.S. Environmental Protection Agency (EPA) and California officials on a fix.
3. A Compensation Fund for Customers has been Created
It is being reported that the deal will include “substantial compensation” to affected diesel owners, with reports saying it will be in the $5,000 range. That would mean the compensation fund would total around $1 billion for VW owners. The compensation fund is being handled by Kenneth Feinberg, the same attorney that handled GM’s ignition switch recall.
4. A Compensation Fund has been Set Up for the Environment
In addition to compensating affected owners, VW has set up a compensation fund for the environment, with the goal of promoting “green automotive” initiatives while establishing an environmental remediation fund after years of vehicles emitting nitrogen oxide at harmful levels.
5. Volkswagen Still Doesn’t Have a Fix for About 85,000 3.0-liter Diesels in Porsche and Audi Vehicles
So far, the announced proposal only pertains to VW owners with the 2.0-liter diesel engine. The company still doesn’t have a fix for approximately 85,000 Porsche and Audi vehicles equipped with the 3.0-liter V6 TDI engine. It is currently unclear how VW plans on resolving the issue with those vehicles, especially since they are in a higher-priced segment.
6. All Details Will be Announced by June 21, 2016
U.S. District Judge Charles Breyer has set a deadline of June 21, 2016 for the parties to file preliminary proposals on the settlement, at which point the public will have a chance to comment before Breyer signs off on it. The agreement will help VW avoid a trial over the emissions violations and economic losses to consumers, which Breyer had threatened to schedule if VW did not meet Thursday’s deadline to an agreement.
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