Volkswagen, which produces both vehicle brands, must pay the refund plus buy back or fix cars that were created to manipulate emissions test results illegally, the Iowa Attorney General’s Office announced Tuesday.
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Owners who choose to have VW buy back their cars would get the National Automobile Dealers Association clean trade-in value from before the scandal became public on September 18, 2015. The battery plant was part of a $1.7 billion investment to start Leaf production in Tennessee in 2013, with most of the money coming from a federal loan.
Under the Tuesday settlement’s terms, US motorists can either sell back or terminate leases of affected vehicles, or have the cars made compliant with environmental regulations.
Volkswagen has been accused of installing software in diesel cars to evade federal emission standards.
The largest-ever automotive buyback offer in the USA came in a deal announced on Tuesday by the Justice Department, Federal Trade Commission, Environmental Protection Agency and California state regulators.
All auto owners, regardless of whether they keep their vehicle, will receive additional compensation of between $ 5,100 and almost $10,000 each.
Although the company has been working on a repair for the vehicles for months, it appears that VW may not be able to fix the cars and will have to buy them all back, according to the documents.
Volkswagen has agreed to pay the state of Kentucky almost $3.5 million in civil penalties in a settlement that could result in up to $100 million for the state and its residents.
Attorney General Mark R. Herring announced Tuesday that the commonwealth will receive more than $100 million and qualified Virginia VW owners tens of millions more.
“The settlements do not resolve the government’s pending claims for civil penalties under the Clean Air Act, nor do they resolve pending claims concerning the 3-litre diesel vehicles”.
The proposed settlements, which are still subject to court approval, have a number of provisions for owners and lessees of the affected vehicles.
Volkswagen has acknowledged that the cars, equipped with 2-liter diesel engines, were programmed to turn on emissions controls during government lab tests and turn them off while on the road. “Also there will be an opportunity for Volkswagen to fix the vehicles that were affected and also partake in a cash settlement of some amount”.
Alternatively, Volkswagen can modify its emission system back to the level approved by the U.S. Environmental Protection Agency (EPA).
The settlement still must be approved by U.S. District Judge Charles Breyer, who has set a hearing for preliminary approval on July 26.
A multistate coalition of State Attorneys General co-led by attorneys general in Connecticut, Massachusetts, New York, Oregon, Tennessee, and Washington, and joined by 37 other states and jurisdictions raised the consumer protection claims against Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., Porsche AG and Porsche Cars, North America, Inc. – collectively referred to as Volkswagen. While Volkswagen marketed the vehicles as environmentally friendly, they emitted harmful nitrogen oxide at rates up to 40 times the legal limit, Miller said.
Will they fix my vehicle?
Owners can still decline Volkswagen’s offer and sue the company on their own.
Volkswagen must recall or fix at least 85 percent of the affected cars or pay additional amounts into the mitigation trust fund, officials said.
Volkswagen said in April it would set aside 16.2 billion euros (US$18.2 billion) and slash its dividend to cover the costs from the scandal.
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The agreement does not lift a ban on sales by VW of its USA 2016 diesel vehicles.
