A California judge has signed off on a $14.7 billion settlement with consumers and the government over emissions scandal that has rocked Volkswagen, tarnishing its brand worldwide.
With nearly $15 billion in the pot, it is difficult to determine what there is for consumers and what is allocated to other causes.
The scandal, also known as Dieselgate, arose when it was discovered that Volkswagen had programmed its diesel vehicles to emit lower levels of harmful gases in official tests than they would in actual driving conditions with drivers on the road.
The computer software installed in the cars included a defeat mechanism which would sense when the car was being tested versus when it was on the road. When driven on the road, the cars’ emissions were far above the legal limits, and multiples of the numbers that tests would show.
The settlement provides consumers who purchased or leased Volkswagen vehicles with options on who they want to move forward. For those who owned their vehicles, they could choose to sell their vehicles back or wait to see if there can be a modification made to their vehicle to reduce the emissions and then decide to get those modifications or sell their vehicles.
For those who leased a Volkswagen vehicle, they can choose to terminate their lease with no penalties or keep their car and receive an approved modification to the vehicle if one is approved.
The details of the $14.7 billion settlement are as follows.
- $10 billion set aside by Volkswagen to buy back cars from consumers starting in November – this includes payments of $5,100 to $10,000 to most consumers who purchased the cars prior to September 2015 in addition to the buyback amounts. Buyback amounts range between $12,500 to $44,000 depending on the model of the car. Any consumer wishing to sell their car back to Volkswagen can register on VWCourtSettlement.com.
- $2 billion is to be invested by Volkswagen in promoting non polluting cars (zero emission vehicles)
- $2.7 billion to support environmental programs throughout the country that will reduce the amount of NOx (nitrogen oxide) by an amount equal or greater to the pollution caused by its vehicles.
As the settlement is administered, there may be further adjustments to address any problems that may arise.