Official: VW and US regulators strike diesel agreement

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In three related settlements, Volkswagen agreed to spend up to 15.7 billion dollars to finally address the cheating scandal in the United States.

The US Department of Justice said that Europe’s biggest automaker agreed on two separate settlements, one with the United States and the State of California and another one with the Federal Trade Commission. Separately, the company also announced an agreement with other 44 US States.

First of all, Volkswagen will have to offer owners of around 475,000 over-polluting 2.0-litre diesels the option of a buyback, to terminate the leases or to fix them, a program that will cost up to 10.03 billion dollars in compensation. The affected cars, part of the deal, are the 2009-2015 Jetta, Passat, Golf and Beetle TDI models, as well as the Audi A3 diesel.

Volkswagen is bound to buyback the cars at their retail value as of September 2015, just before the scandal broke. The Justice Department said the customers would receive between 12,500 and 44,000 dollars, depending on their car’s model, year and mileage. The ones who have loans will have the possibility to make Volkswagen off those loans, up to 130 percent of the car’s value. As an example, if the owner is entitled to a 20,000-dollars buyback, VW would pay off his loans up to 26,000 dollars.

Under the settlement, the company must repair or buyback 85 percent of the 475,000 vehicles or face penalties otherwise. However, a fix is still under doubt, as Volkswagen will have to find a proper technical solution, that will have to be approved by the regulators.

The agreement does not resolve pending claims for civil penalties or any claims concerning the 80,000 larger 3.0-liter premium diesel vehicles.

The second part of the pact requires Volkswagen to pay 2.7 billion dollars to fund “green” projects across the country for reducing NOx emissions and to invest 2 billion dollars over 10 years “toward improving infrastructure, access and education to support and advance zero emission vehicles.”

Furthermore, Volkswagen also announced that it has agreed with the attorneys general of 44 US states, the District of Columbia and Puerto Rico to resolve existing and potential state consumer protection claims related to the diesel scandal for another settlement worth 603 million dollars.