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VW Will Buy Back or Fix 3.0-Liter Diesels

2016 Volkswagen Touareg

CARS.COM — Volkswagen has agreed with regulators and the owners group to spend about $1.2 billion to buy back older 3.0-liter V-6 diesel vehicles that violate emissions rules and to fix the newer ones, plus give those owners a cash payment.

Related: VW Diesel Crisis: Timeline of Events

The proposed deal, filed late last night, includes payments of $225 million to an EPA  environmental mitigation fund and $25 million to the California Air Resources Board for a program supporting zero-emissions cars. Those payments were agreed to previously while the settlement talks on the roughly 78,000 V-6 vehicles proceeded.

The company has admitted to installing cheating software on its diesel vehicles, which enabled it to meet clean air requirements in testing but let it emit illegal levels of pollutants on the road. VW has already agreed to plead guilty to the cheating and pay $4.3 billion in fines to settle a Department of Justice investigation.

VW also has a $14.7 billion settlement program underway for its approximately 475,000 2.0-liter four-cylinder diesels. The settlement includes buyback offers for all the vehicles and additional compensation to owners. Details are posted here.

A federal court hearing in San Francisco is scheduled for Feb. 14 for preliminary approval of the proposed 3.0-liter diesel deal pending public comment. If final approval is then granted, the settlement program could begin this spring.

Emissions Fix Still to Come

The 3.0-liter diesel deal covers all 2009-16 3.0-liter diesel vehicles sold in the U.S., including about 47,000 Audis, 22,000 Volkswagen Touaregs and 11,000 Porsche Cayennes now in use. Volkswagen Group will buy back about 20,000 of the 2009-12 Volkswagen Touaregs and Audi Q7s.

A fix for the newer vehicles, plus payment, is proposed for diesel models of the following: 

  • 2013-15 Audi Q7
  • 2014-16 Audi A6, A7, A8, A8L, Q5
  • 2013-16 Porsche Cayenne
  • 2013-16 Volkswagen Touareg

That fix has not yet been approved by regulators, and the agreement sets out a schedule of deadlines for one to be submitted and approved. VW says that it will be able to bring the newer vehicles up to the original standards they were supposed to meet; if no fix can be designed, however, the buyback program would extend to all cars at greatly increased cost to Volkswagen. With the 2.0-liter vehicles, a fix has been approved only for 2015 models.

“With the court-approved 2.0-liter TDI program well underway and now this proposed 3.0-liter TDI program, all of our customers with affected vehicles in the United States will have a resolution available to them,” Hinrich J. Woebcken, CEO of Volkswagen Group in the U.S., said in a statement. “We will continue to work to earn back the trust of all our stakeholders and thank our customers and dealers for their continued patience as this process moves forward.”

The Payments

Under the proposed agreement, owners of the older Touareg and Q7 vehicles that will be bought back would receive a total payment for the vehicle and restitution of $26,255 to $58,657, depending on the vehicle, its age and its equipment.

If a full fix is approved, owners of the newer vehicles will get the fix plus restitution of $8,539 to $17,614, under a complex formula depending on the vehicle, its age and its equipment. All lessees would get $3,200. They would get an additional $500 under the deal if the fix reduces fuel economy by more than 3 mpg, cuts horsepower by more than 5 percent or cuts torque by more than 5 percent. The deal also has provisions that allow for the possibility that only a partial fix will be available. It would let owners choose a buyback or take the partial fix and an increased restitution payment.

A full table of the repayment ranges by model for the buyback, full fix and partial fix has been posted by the Federal Trade Commission here. A separate proposal to settle an FTC investigation for false advertising of the diesels was filed along with the agreement on the vehicles, as was an agreement by Bosch, supplier of the software, which is participating in the payments.

The deal also includes provisions for termination of leases, for aid to owners with outstanding loans exceeding the value of the vehicles, and for vehicles that changed owners after September 2015, when the emissions violations came to light and before the Jan. 31 filing of the proposed deal.

Two Volkswagen workers have been arrested in the scandal and five more are under indictment.

 
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