By on April 20, 2016

2016_VW_Passat_Exterior_Grille

On the eve of a key U.S. deadline for a diesel emissions fix, Volkswagen has reportedly agreed to pay all American owners of afflicted TDI models $5,000 each.

The deal, reported by Germany’s Die Welt newspaper, would allow the automaker to avoid going to trial this summer, according to Automotive News.

Volkswagen was facing an April 21 deadline to outline a comprehensive fix for the 580,000 U.S. diesel models equipped with “defeat devices” designed to sidestep emissions regulations. The deadline was set in March by a U.S. District Court judge.

Any fix would have to satisfy the Environmental Protection Agency and California Air Resources Board, either by fixing the vehicles, buying them back, offsetting their pollution, or a combination of tactics.

The EPA hasn’t commented on the supposed deal, which would cost $2.9 billion for the customer payouts alone. Last month, the automaker was said to be in talks to create two large environmental remediation funds designed to offset emissions from its diesel vehicles.

The news of a payout follows a Reuters report that Volkswagen is planning to increase the amount of cash set aside to deal with the financial fallout of the scandal. Already, the automaker has 6.7 billion euros ($7.6 billion) in its emergency fund, but the latest move would push the pile well into the double-digit billions.

Analysts have estimated that Volkswagen’s tally of costs could hit 30 billion euros ($33.9 billion), and predict that Volkswagen’s fourth-quarter earnings from 2015 (due to be released on April 28) could see a 70 percent drop.

The Reuters report also stated that Volkswagen was resisting efforts from U.S. consumers (serving as plaintiffs) to settle the matter in court, instead hoping to reach a deal with regulators.

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31 Comments on “Volkswagen Might Pay Every U.S. Diesel Owner $5,000 to Avoid a Trial...”


  • avatar
    DeadWeight

    It’ll never fly on the regulatory (separate civil matter) or civil trial (class action) front.

    This is commonly known as a “fluid recovery” type compensation, but I am very skeptical that a large plurality, if not MAJORITY, of affected VW TDI owners will NOT choose to opt out of any such class-action lawsuit whereby a check for $5,000 is their sole remedy.

    • 0 avatar
      sirwired

      The thing is, if the remedy is dictated by the feds, the owners may not have a choice about accepting the $5k. However, I do not expect that the check would preclude private lawsuits.

      Frankly, I think an owner would have difficulty obtaining damages much greater than $5k, because the only private recovery is going to be for diminished value. (The damage to the environment may be worth more, but any recovery for that is not going to go to owners.)

      • 0 avatar
        DeadWeight

        “The thing is, if the remedy is dictated by the feds, the owners may not have a choice about accepting the $5k. However, I do not expect that the check would preclude private lawsuits.”

        If enough people (large plurality or majority) opt out of any class-action lawsuit which has as its sole remedy a payment of $5,000 per owner, then VW still hasn’t resolved the pending litigation, and financial and legal Chinese water torture that goes with tens of thousands (hundreds of thousands?) private lawsuits…

        …and as I wrote above, I also find it difficult to believe VW can convince the EPA to just let the excessive emissions slide EVEN IF civil litigation from/by owners of affected vehicles was settled by way of the mailing of checks to owners of thee non-compliant vehicles.

      • 0 avatar
        Xelas

        Customers were sold items unfit for purpose. I think this is stonger case than diminished value, especially if they cannot register their cars or pass smog.

  • avatar
    28-Cars-Later

    VAG: Shut up and take my money.

  • avatar
    notwhoithink

    So Steph Williams links to the Automotive News article as his source and writes about how VW is going to give all of the TDI owners $5000 cash. But what else did he leave out from the AN article? How about this line:

    “The German automaker is expected to tell a federal judge in San Francisco Thursday that it has agreed to offer to buy back up to 500,000 2.0-liter diesel U.S. vehicles that used sophisticated software to evade U.S. emission rules.”

    Oh wait, so it’s not just $5000? It’s $5000 + a buyback? Suddenly people are putting down their pitchforks and thinking…

    • 0 avatar
      SCE to AUX

      Huge journalistic oversight, indeed.

      Now the debate will be whether a buyback provides fair enough compensation.

    • 0 avatar
      here4aSammich

      It won’t be $5k AND a buyback. I’m sure it will be one or the other, and not everyone will be eligible for buybacks. They must already know which cars are the dirtiest of the fleet and will attempt to get those off the road via buyback.

      • 0 avatar
        notwhoithink

        From the actual article:

        “VW will pay cash compensation to owners who either sell their vehicles back or get them fixed, a source briefed on the matter said. Owners selling back their vehicles will get an additional cash payment on top of receiving the estimated value of the vehicles from before the emissions scandal became public in September 2015.”

        You were saying?

        There are 482,000 affected 2.0L TDIs in the United States. They’re saying they’ll buy back about 500,000 cars. That covers all of the 2.0L TDI models, which the CARB commissioners have been saying for weeks didn’t appear to be able to be made compliant. That just leaves the 3.0L V6 models to deal with.

        Remember, they HAVE to get these cars off the road or fix them, and they clearly are not going to be able to fix them.

        So that would settle the claims of the EPA and CARB, other than fines for past transgressions. But there’s still the class action suit and the FTC that will need to be addressed, and that’s going to be even more money. The FTC says that due to the fraud in the marketing and sales of the affected TDIs that VW needs to pay back the full purchase price. The class action steering committee is pushing for a buyback a purchase price as well. Even if the judge approves a deal with EPA and CARB, there’s still more money coming for owners.

        • 0 avatar
          PeriSoft

          “Owners selling back their vehicles will get an additional cash payment on top of receiving the estimated value of the vehicles from before the emissions scandal became public in September 2015”

          I also saw that owners have up to two years to decide what to do. What I wonder is if it’s possible to buy a TDI now, drive the ass off it for two years, then get five large plus the value from before you bought it!

  • avatar
    Jagboi

    If I want to import a non compliant car it has to be brought into compliance with emissions, be exported, or crushed. I don’t have the option to make a payment and drive a noncompliant car. Why should VW be treated any differently? The purpose of emission regulations is clean air, not to generate revenue.

  • avatar
    DenverMike

    I’m not sure it’d except $5,000 or even $20,000. What about the damage my TDI did to my health and that of my family? Future cancer? 4,000% more probable, no?

    • 0 avatar
      SCE to AUX

      You’d never prove it, unless you simply let the TDI idle in the garage for the last 7 years; that’s for the EPA to tackle.

    • 0 avatar
      jpolicke

      How much do you think you should be compensated for theoretical, unproven harm? 4000% times the number of angels dancing on the head of a pin?

      • 0 avatar
        DenverMike

        Since it’s 4000% of what’s the legal limit and 4000% more than what I signed up for, I’ll take $3.5 million to take my chances.

        It’s no different that 40+ tailpipes at the back of my TDI car, from 40+ actually “Clean” TDIs. Inside the car, it has to be equal to at least 3 of those “Clean” TDI exhaust pipes plumbed straight into my HVAC!

  • avatar
    Nick 2012

    Yeah, that omission of a buyback is a bit key.

    My mom has a cheater-2011 TDI Wagen. It has ~115,000 mostly highway miles put on by a cautious senior citizen. In the past two weeks:

    – The DPF filter light illuminated and driving at 2500 RPM for 15-20 minutes won’t reset it.
    – The A/C crapped out.
    – When at the dealer for items 1 & 2 (est. cost to repair > $3000), she was informed its time for a timing belt change (another $1200).
    – The V-tex is noticeably wearing, part of the dash is de-laminating, and it makes ominous groaning noises from deep within the body as if it’s tired of life.

    Scarily for me, apparently engine fires are not uncommon if the DPF light is on and the car keeps trying to regen. While I wouldn’t have a problem bolting from a flaming VW, my mom hauls my kids around, and unbuckling two restrained toddlers from a burning car in traffic isn’t something I want to think about.

    I loved VW as a young enthusiast. Even excluding the scandal, watching the TDI disintegrate in light use soured me forever on it.

    • 0 avatar
      SCE to AUX

      Instead of spending 4-figure money to fix that turd, maybe soon she’ll see a five-figure check. I hope so.

      In the meantime, perhaps she should practice a fire drill rescue of the back seat occupants, just in case.

    • 0 avatar
      here4aSammich

      At 115k on the clock, she’s overdue for a timing belt anyway. Don’t blame the dealer.

      • 0 avatar
        Nick 2012

        In no way am I blaming the dealer, who is well-regarded in my area. The timing belt was not an expense my Mom was planning for (granted, she could have reviewed the service manual before purchase, etc.) but it comes at a very inopportune time and isn’t something she would have to deal with had she purchased a:

        CR-V/Rav4/RDX/Pilot/Highlander/Equinox/Flex/Explorer/Lambda Triplet/MDX/Rx350/Terrain/Escape/Durango/Grand Cherokee/Santa Fe/Tuscon/Sorento/et. al.

        • 0 avatar
          tubacity

          Hope mom can find a solution not involving too much spending.
          Just to be complete, Pilot, MDX, RDX and usual Honda Acura V6’s still have timing belts. Some fanboy might reply in an obnoxious way that timing belts are so superior that they are the holy grail. Even though late Honda 4cyl engines use timing chains.

          • 0 avatar
            Kyree S. Williams

            Timing chains are normally fine, but I’m quite weary of Volkswagen timing chains, seeing as how the company’s Audi engines have a history of improperly-designed guides that stretch the chain. That’s a much bigger deal than needing to replace a timing belt (which you can actually do yourself).

    • 0 avatar
      Kyree S. Williams

      Didn’t you say she disliked the car anyway?

      She should be glad to be rid of it…haha

    • 0 avatar

      Your light is a cracked DPF filter, and no, VW won’t warranty it. Sorry. 8 hours labor, and probably something your indie won’t want to look at. The pollution control is not only a fraud, but a poorly engineered one.

      I never thought I’d say this, but I’m SO happy the insurance company carted my TDI around with a forklift. My accident didn’t total the car, but using a forklift on it (plus two hours of calling the company about it) did……

      • 0 avatar
        Xelas

        Note that in some states, emissions equipment is covered under a separate warranty that may be much longer than the powertrain warranty. Check your local laws.

  • avatar
    healthy skeptic

    Act quickly! $5,000 cashback on select VW diesel TDIs!

  • avatar
    mustang462002

    2013 TDI owner here.

    Love my car no complaints. I’ve kept receipts for 60,000 diesel purchases because of the HPFF failures.

    The DPF failure has pushed me over the top on this car. Will dump as soon as possible.

    I knew about the HPFF failures when I bought it but I liked the torque and mileage. I also though this was rare and it was worth the risk.

    I really don’t care for the emissions thing. I see it as crappy goverment regulators. Why should I be compensated for this?

    Compensate me for DPF failures!

    • 0 avatar
      SCE to AUX

      “Why should I be compensated for this?”

      Because it looks like VW is going to crush your car, and a simple buyback (likely valued at a depreciated rate) means you won’t end up with enough money to buy a new one.

      Or, if you decided to trade the thing, you’d be shocked at how little you can get for a radioactive car.

    • 0 avatar
      28-Cars-Later

      MMR projected the MY10s I was screwing around with to be worth 25% of what they were worth at the start of the crisis by March 2017. Run yours till the wheels fall off because come next year they will only be giving you like 4K on trade. The 5,000 Bennie bux from VAG won’t even cover this year’s 50% value drop in most cases, let alone the total devaluation.

  • avatar

    I know new purchases of used vehicles are pretty much out of the running for such programs but I was thinking with prices depressed the way they are a TDi would be a pretty good deal right now.

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