VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL...

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE

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VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE

– Agreement reached with Volkswagen to fix or buy hundreds of car back in the wake of diesel gate.

– The agreement is a part of a federal court settlement announced in San Francisco.

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE
Volkswagen Car

The Volkswagen diesel scandal just got a lot more expensive for the German car maker.

According to the New York Times, Volkswagen, on Thursday afternoon, agreed to fix or buy back roughly 500,000 of its diesel-powered models in the U.S affected by the company’s intentional cheating on emissions testing. The agreement is a part of a federal court settlement announced in San Francisco.

Volkswagen planned to repair the cars, which had been fitted with emissions test-defeating software, earlier this year. However, the California Air Resources Board rejected the repairs because they do not put “vehicles into compliance and reduce pollution.”

A federal judge in San Francisco overseeing the multi-district litigation said Thursday that the company had reached a tentative agreement that will lead to the buybacks and further “substantial compensation” for car owners if no new fix is agreed upon.

Specifics of that compensation remained unclear on Thursday, though German newspaper Die Welt had earlier reported car owners could receive as much as $5,000 per vehicle for their troubles.

If no new fix is agreed upon, Volkswagen will simply buy back the affected vehicles. Automotive research firm Kelley Blue Book estimates a buy-back in the U.S. could cost $7 billion nearly the entire $7.6 billion sum the car maker set aside to weather the diesel gate storm.

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That’s not the end of the costs for VW, though. Lawyers are negotiating the amount of fines the car maker will have to pay as well as the amount of owner compensation.

Details of the plan are due before the court by June 21, but under the terms of the agreement, Volkswagen will offer owners of roughly 480,000 cars equipped with 2.0-liter diesel engines the option of either having their car modified or bought back by the company.

But before all TDI owners celebrate too quickly, note the parameters of Thursday’s agreement only apply to owners of affected vehicles with 2.0-liter engines.

An additional 80,000 affected cars in the US contain 3.0-liter engines that fall outside the scope of Thursday’s agreement. It’s unclear when those owners will see relief, though those discussions are ongoing.

Tom Young, one of the lawyers representing the plaintiffs in the case said, “The deal will allow the German manufacturer to bring some certainty back to its operations, while also providing relief to disgruntled drivers.”

Michelle Krebs, a senior analyst at Auto trader also said, “A federal judge’s blessing of Volkswagen’s framework of a plan to take care of its customers is a long-awaited first step, but much more work needs to be done to flesh out the details in the coming months.

Indeed, it is a fairly sketchy framework at this point. Meantime, Volkswagen customers will have to stay patient a bit longer until all of the details of the compensation deal are hammered out.”

Thursday’s agreement will cost Volkswagen billions, and it further requires the company to establish a fund for environmental “remediation.” Details of that effort were unclear Thursday, though those funds will ostensibly go to help offset the damage caused by nearly 600,000 cars designed to spew pollution by as much as 40 times the federal emissions thresholds established by the Clean Air Act.

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Volkswagen put out a short press release following the announced agreement, “These agreements in principle are an important step on the road to making things right. As noted today in court, customers in the United States do not need to take any action at this time.”

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE

VOLKSWAGEN SET TO FIX OR BUY HUNDRED OF CARS BACK AMIDST DIESEL GATE