This week Volkswagen reached a partial settlement with the federal government and class action plaintiffs that will see the automaker spend up to $14.7 billion. The bulk of that settlement, about $10 billion, will go to consumers who purchased or leased VW vehicles that were outfitted with illegal emissions-cheating technology.
Here’s what VW owners need to know about the settlement:
What Vehicles Are Covered?
One of the reasons why it is a “partial” settlement is because the $14.7 billion agreement doesn’t cover all of the vehicles included in the diesel emissions scandal. The settlement only covers about 500,000 two-liter diesel engine vehicles sold by Volkswagen. The following models ARE covered:
VW Beetle TDI (model years 2013-2015)
VW Golf TDI (model years 2010-2015)
VW Jetta TDI (model years 2009-2015)
VW Passat TDI (model years 2012-2015)
Audi A3 TDI (model years 2010-2013; 2015)
What about the VW Touareg and Porsche Cayenne?
The settlement does not cover three-liter diesel engine vehicles sold by Volkswagen and its subsidiaries. Volkswagen said Tuesday that it “continues to work expeditiously” to reach an agreement on those vehicles.
What Are My Options?
Volkswagen owners will have two options under the settlement: they can either opt to sell back their vehicle to Volkswagen or have their car modified to meet emissions standards at no charge. The catch is, right now, there is no approved fix in the U.S. for any of the 2.0-liter TDI vehicles.
Any fix must be approved by both the Environmental Protection Agency and the California Air Resources Board. Mary Nichols, chairman of CARB, told reporters that in order to be approved, the technical fix will need to work, be durable and not adversely affect driving.
“After the history we have with the company, we are not about to take anything on faith or trust,” Nichols said.
Consumers who leased one of the covered VW vehicles can either terminate their lease or wait for a fix. Either of those options would be accompanied by a cash payment from VW, which will range from around $2,600 to around $4,900.
How Much Will VW Pay to Buyback My Car?
Payments under the buyback option will range from $12,500 to $44,000, according to FTC Chairwoman Edith Ramirez. The value of the cars is based on their resale value before the emissions scandal was announced.
Along with the settlement, the FTC filed a document with the court that outlines how the cars will be valued for the purposes of the buyback program. The value depends on a number of factors, including model year, mileage, location of the car, and the factory-installed options. Here is an example illustrating how much the values can vary, even within the same model car:
a model year 2010 Golf Hatchback 4D TDI with 77,000 miles that is registered in California and equipped with an automatic transmission and a power sunroof would be valued at $16,667.
a model year 2014 Golf Hatchback 4D TDI I4 with 18,000 miles that is registered in Oregon and equipped with a power sunroof, navigation system and automatic transmission would be valued at $26,867.
Under the class action settlement, VW owners will be able to log onto http://www.vwcourtsettlement.com/ by July 26 and input their vehicle identification number and mileage to see exactly how much their car is worth under the buyback program.
Do I Get Anything If I Wait for the Fix?
If a fix is approved, owners will receive a payment of between $5,100 and $10,000 to compensate them for diminished value of the vehicle.
How Quickly Can I Sell Back My Car?
The partial settlement announced this week is still at the proposal stage. It must undergo a 30-day public comment period and is subject to approval by Judge Charles Breyer, the federal district judge that is overseeing the VW litigation.
Breyer has scheduled a July 26 preliminary approval hearing on the proposed settlements. Elizabeth Cabraser, the lead attorney for the consumer plaintiffs, said that a final approval hearing will likely be held in October.
If that timeline holds, buybacks could begin before the end of 2016.
How Long Do I Have to Decide?
Cabraser said that consumers shouldn’t “feel rushed” to make a decision on what to do with their Volkswagen TDI. Even if a fix is found, it may not be approved until sometime in 2017 or 2018.
Owners will have until Sept. 1, 2018, to submit a claim under the settlement, and if eligible, until Dec. 30, 2018, to either sell their car back or get it repaired.
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