Although it won’t be official until the U.S. District Court judge presiding over the case gives final approval, probably sometime in the fall, Volkswagen today announced that they’d reached a settlement agreement of roughly $15.3 billion with federal regulators and private plaintiffs. After the company filed a proposed consent decree with the court, the U.S. Department of Justice gave its stamp of approval.
From that $15.3 billion, just over $10 billion is earmarked for owners of the 475,000 Volkswagen and Audi cars equipped with the 2.0-liter TDI turbodiesel engine. As part of the Volkswagen settlement, the carmaker will offer to buy back each of the affected cars based on its value as stated in the September 2015 edition of the NADA Used Car Guide. In addition to covering the value of the car, each owner will also receive at least $5,000 in compensation, according to Reuters.
The settlement also allows owners to opt for having Volkswagen fix and keep their cars once such a fix is approved by the government. If owners choose this option, Volkswagen will make the fix for free and still compensate the owner with a cash amount. The settlement deal also includes early termination without penalty of any leases involving the affected cars. Again, Volkswagen will offer cash compensation in these cases, in addition to terminating the lease.
Other major payouts from the $15.3 billion are $2.7 billion to an environmental trust for managing nitrogen-oxide emissions from diesel engines and a $2 billion investment in zero-emissions infrastructure. Also set aside in the settlement is more than $600 million to resolve existing and potential state consumer-protection claims related to the problem cars in 44 states, Puerto Rico and the District of Columbia.
Volkswagen and the government have yet to agree on how to address the more than 80,000 Audi, Volkswagen and Porsche cars with the 3.0-liter TDI engines, which are not included in today’s Volkswagen settlement announcement.