What to expect from VW’s diesel settlement
DETROIT — Volkswagen owners can finally dump their cheatin’ cars, if they want to.
The German automaker has agreed to an unprecedented U.S. settlement to make things right after admitting that it programmed about half-million of its diesel cars to cheat on emissions tests. When driven on the road, the vehicles put out levels of nitrous oxide well above U.S. pollution standards.
Volkswagen will spend up to $15.3 billion to settle consumer lawsuits and government allegations that it cheated on emissions tests in what lawyers are calling the largest auto-related class-action settlement in U.S. history.
Up to $10 billion will go to 475,000 VW or Audi diesel owners, who thought they were buying high-performance, environmentally friendly cars but later learned the vehicles’ emissions vastly exceeded U.S. pollution laws. The settlement with owners and government agencies still needs to be approved by a federal judge — which could happen as early as this fall.
Here are answers to questions about the deal:
Q: What exactly am I getting from VW?
A: You can choose. VW will buy back your car — regardless of its condition — at the National Automobile Dealers Association clean trade-in price before the cheating was made public on Sept. 18, 2015. Or the company will fix your car. The fix has not been determined and still must be approved by the Environmental Protection Agency and the California Air Resources Board. VW is expected to submit possible fixes beginning in November.
In either case, if you owned the car on or before Sept. 18, VW will pay you $5,100 to $10,000 for your trouble, depending on the age of the car and whether you owned it on or before Sept. 18. Buybacks will begin this fall if the settlement is approved. Owners will have until Sept. 1, 2018, to make a decision.
You’ll get bigger payments for your trouble if you owned your car on or before Sept. 18, 2015. The payments are smaller if you bought it after that. VW also will buy out your lease if your vehicle was leased through Volkswagen Credit.
Q: How much are these cars worth?
A: Owners will get $12,500 to $44,000, depending on the model, age, mileage and options on their car.
Q: Should I take the buyback or the fix? A: It depends. From a financial standpoint, it’s probably better to wait. You have until Sept. 1, 2018, to seek a buyback. So you can drive the car for more than two years without penalty, as long as you don’t go over 12,500 miles per year. You’ll still get the clean tradein value from before the scandal was made public. Also, fixes are not ready and may not be submitted by VW until at least November. Then they have to be tested and approved by government regulators. Repairs could hurt mileage or performance.
Q: Can I just keep my car without getting it fixed?
A: You could, but eventually you would violate the Clean Air Act by spewing too much nitrogen oxide. If you live in a state that doesn’t test diesel cars, such as Texas, then you might be able to do nothing. But in states that have pollution tests, you run the risk of being caught.
Q: Will attorney fees take all of my payments like they do in many class actions?
A: No. They are not included in the settlement and will be negotiated later with VW.
Q: I’m just going to take the money and buy a new car. Does any other automaker sell something that performs like a VW diesel?
A: Your choices are pretty limited because VW had a lock on lowercost diesels in the U.S. The closest would be the Chevrolet Cruze diesel, but it was made only through the 2015 model year. There are only about 30 left at dealers nationwide starting at $25,660. Otherwise, the options get pricier. The BMW 328D diesel starts at $39,850, and the Jeep Grand Cherokee diesel starts at more than $41,000.
Q: Can I buy a new Volkswagen diesel?
A: Volkswagen has been under a stop-sale order for its 2016 diesels until they can be fixed. Since there’s no approved repair ready yet, they still can’t be sold. They could go back on the market when fixed.
Q: I own a 3-liter V6 Volkswagen. What happens to me?
A: That’s still being worked out by all the attorneys. You are not covered by the package announced Tuesday.
Q: If I buy an affected VW diesel today, will I be eligible for compensation?
A: Yes. The eligibility for the compensation transfers to the new owner. Former owners who sold their VW diesels between Sept. 15, 2015, and June 28, 2016, are also eligible for some compensation.