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Everyone take one step back, breathe a sigh of relief and go open a savings account.
Ulrich Baumgarten/Getty ImagesBack in September, Volkswagen admitted to willfully deceiving emissions regulators around the world with special software in its diesel vehicles. Now, one chapter of the shitshow known as Dieselgate is coming to a close, as Volkswagen has finally made public the details of its legal settlement with US regulators.
If you own an affected diesel Volkswagen, your options are twofold. VW will offer to buy back the half-a-million-or-so dirty diesels on US roads, or it will offer to repair the vehicle so that it's fully compliant with US emissions regulations.
When it comes to buybacks, Volkswagen will reportedly offer a payment equal to the National Automobile Dealers Association (NADA) "Clean" trade-in value, adjusted for mileage and options.
To account for lost value as a result of Dieselgate, VW's buyback will reportedly utilize NADA pricing from September 2015, before the news broke. For lessees, Volkswagen will offer to terminate the remainder of the lease at no cost. Buybacks are expected to begin as early as this fall, provided that the settlement is accepted and finalized. Here is a link to the raw numbers of the buyback program.
If the owner or lessee wishes, Volkswagen will forego buybacks or lease terminations in favor of actually fixing the car. Once a fix has been proven to pass US regulatory muster, Volkswagen will fix affected vehicles at the owners' request, which will include extended warranties and lemon-law protections. This is more of a "wait and see" approach, as no party has agreed to a fix just yet.
But what if you have loans? "Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000)," the EPA said in a statement.
Along with either buying back or repairing the cars in question, Volkswagen will infuse some cold, hard cash into the equation -- between $5,100 and $10,000 per affected vehicle. It appears that this one-time payment will be made to both owners and lessees. So long as the car was picked up by September 18, 2015, it's eligible for the cash payment.
Bear in mind, this only covers VW's 2.0-liter diesel vehicles. 3.0-liter diesels are not included in this settlement, and will be dealt with separately. Diesel vehicles included in this settlement include the 2013-2015 Beetle, 2010-2015 Golf, 2009-2015 Jetta, 2012-2015 Passat and the 2010-2013 and 2015 Audi A3.
In all, this should cost Volkswagen about $14.7 billion, $4.7B of which will go toward expenses relating to environmental impact, and that's not counting its other pending court cases. The number could get higher, too: "Under the U.S./Califoia settlement, Volkswagen must achieve an overall recall rate of at least 85% of affected 2.0 liter vehicles under these programs or pay additional sums into the mitigation trust fund," the EPA said in its statement. "The FTC order requires Volkswagen to compensate consumers who elect either of these options."
To find out if your vehicle is covered under this settlement, you can head to VWCourtSettlement.com. You can also use the site to make claims, receive updates or schedule work with your local VW or Audi dealers. It will also explain your options, in case you're not sure what you want to do.
We'll get more information as the dust settles and every party has time to sit down, construct statements and walk the public through the motions. There's still an approval process to wade through, as well. But I've been waiting months to finally say this: There actually is a light at the end of this dark, dark, smog-laden tunnel.
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