VW prepares to offer buy back of recalled vehicles
Sources close to the Volkswagen negotiations with U.S. government officials say the company is getting close to announcing a deal that would finally answer questions about how it intended to deal with the hundreds of thousands of recalled vehicles. Sources say the automaker will offer to buy back nearly half a million impacted vehicles, an attempt to turn the page on a disastrous period for the car company.
The company said that it will agree to buy back up to 500,000 of the older
2.0-liter diesel engine vehicles sold in the U.S., which contain flawed
software designed to cheat U.S. emissions tests. This means that the Jettas,
Golfs and Audi A3s sold since 2009 would be included. However, another
100,000 vehicles with larger 3.0-liter diesel engines, mainly Audi and
Porsche models, will not be part of the buyback offer.
In addition to buying back the impacted vehicles, VW is said to also have agreed to create a compensation fund for owners as well as an environmental offset fund. The compensation fund will include an additional $1 billion for vehicle owners, though it has not yet been decided how that money will be apportioned. The environmental fund will compensate the EPA and other environmental agencies for pollution released by the VW vehicles.
So far, experts say they expect VW to pay owners who either get their vehicles repaired or sell their vehicles back. Owners are expected to be given two years to decide how they would like to proceed. Anyone who wants to sell is thought to be given a cash payment as well as the estimated value of the vehicle from before the emission scandal became public last year. A German newspaper recently released an article indicating that owners would each receive approximately $5,000 as part of a future settlement, though this has not yet been confirmed.
What hasn’t yet been decided is what VW will be allowed to do with the impacted vehicles it buys back. Regulators have not yet decided if it will allow the car company to repair and then resell the used vehicles or if they will instead be ordered off the road permanently.
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