A Volkswagen logo is displayed during the Geneva Motor Show 2016 on March 1, 2016. (Photo : Getty Images/Harold Cunningham)
The United States government, Volkswagen and private lawyers agreed on a deal for the automaker to spend more than a billion dollars to pay owners of diesel-powered vehicles, which cheated on emission tests as part of the settlement fund required by the Environmental Protection Agency. The deal would include buyback offers to some owners, said a person briefed on the matter, but requested anonymity as the deal has not been publicly released yet. The $1 billion dollar amount is on top of the cost for buying back cars.
The deal includes a maximum amount of spending, but it has not finalized yet how much each car owner would get, Reuters reported. Some car owners would have the option of having their cars repaired by VW or the automaker will buy them back, though it varies from model, year and engine type.
In September, the EPA discovered 500,000 U.S. vehicles that were equipped with illegal defeat devices, bringing scandal to the German automaker firm. The cars cheated on emission tests using a software so that they would be within allowable emission ranges and pass lab tests. After the test, the emission control system would then be switched off when the car travels on the actual road.
A court hearing is set to be conducted on Thursday in San Francisco. However, plans to fix the vehicles and cost of fixes are still under negotiation. Furthermore, the deal has no plan on how to repair the cars, and it is still is not clear how much the owners will get as compensation.
With a billion to spend, it will appear about $1,700 fund per car. However, some owners of new models whose software have been fixed may receive less. There are about 325,000 owners of older cars which need more extensive fixes who will likely get more since the repairs could affect performance and mileage.
VW car owners filed several lawsuits against the German carmaker after they found out in September that VW intentionally defeated emission tests, putting dirty cars on the road. VW faces $20 billion in fines for violations of Clean Air Act, prior to paying to fix the cars or compensate their owners. Lawyers of the car owners stated in court papers that if there is no deal, they want a fast hearing to have an "equitable relief" that would commence in July, according to St. Louis Post-Dispatch.
VW said it set aside $7.3 billion for recall and regulatory penalties as mentioned in the video below:
