Car owners cheated by Volkswagen could get $5,000
German newspaper reports VW reaches settlement.
Volkswagen is prepared to settle a lawsuit over the illegal defeat devices installed on more than a half-million vehicles by paying every customer $5,000, according to Die Welt, one of Germany's leading newspapers. The development comes a day before the deadline set by a US federal judge for the company and regulators to reach an agreement on a proposed fix for the pollution-spewing cars.
A payment of $5,000 per car would cost the company nearly $3 billion, and that amount comes on top of whatever amount it will cost Volkswagen to either repair or buy back the vehicles. So far the Environmental Protection Agency hasn't approved a fix. An agency spokesperson declined comment Wednesday on the potential for one.
For customers, the $5,000 payout would offset the dwindling value of their scandal-pocked vehicles. The average auction value of VW's diesel vehicles dropped by 25 percent, from $14,153 in June 2015 to $10,402 in March, according to Kelley Blue Book. Analysts from the global forecasting company say it would cost Volkswagen $7.3 billion to buy back the affected US cars.
Volkswagen purposely rigged almost 600,000 cars to evade emissions tests. The vehicles polluted their environments by as much as 40 times the thresholds permitted in the Clean Air Act, according to the Notice of Violation served to the company.
An agreement in court Thursday wouldn't spell the end of Volkswagen's self-inflicted problems. The Federal Trade Commission is investigating the company for potential deceptive advertising related to its "Clean Diesel" advertisements.
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