Volkswagen owners may be happy to hear that the car company that rigged its diesel emission tests has submitted a $15 billion settlement offer for review with a federal court in San Francisco. The settlement, if approved, would set aside about $10 billion dollars for owners and pay about five billion dollars in fines to state and federal agencies.
According to Bloomberg News, which first reported the settlement, the car maker is also going to announce a settlement with states in another separate case soon. The settlement amount under consideration now is reportedly more than any other automaker has ever paid to settle a civil suit, and the automaker is still facing cases on three continents.
Reportedly Volkswagen had set aside nearly $18 billion to address claims arising from the emissions-test cheating scandal that led to this case. But some experts believe that the scandal will cost the company as much as 55 billion euros, or about $61 billion dollars. That figure includes litigation costs and fines for civil and criminal cases worldwide. About $10 billion of the settlement under consideration in the US now, if approved, would be set aside to buy back owner vehicles at the value they had before Volkswagen admitted to rigging diesel emissions tests in violation of California and U.S. standards last year.
The settlement designates money for owners who were impacted by the car company's cheating scandal. Those VW owners who wish to participate in the settlement -- if it is ultimately approved -- can sell back their cars or have them retrofitted to meet emissions standards. But environmental regulators have not yet approved the proposed fix by VW and reportedly the company has until late in 2018 to submit a viable update.
According to a source that spoke to Bloomberg anonymously, this could impact the ultimate settlement amount. If lots of owners choose to fix their cars rather than sell them back to VW at pre-emissions scandal values than the company may not end up spending the whole $10 billion set aside for buy-backs.
It was only last September that Volkswagen admitted to years of cheating on diesel tests. There is still a long road ahead for VW and owners of its cars who were duped by the emissions scandal. The first thing that has to happen before owners will see any relief is that a judge must determine whether to approve the settlement. Assuming that happens, VW will still have some time to come up with a fix for owners who want it. Those who do not can sell back their car to the company. So you still have plenty of time to reflect on which resolution will work for you.
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