Score one for Volkswagen and Audi owners in the US.
Dieselgate broke in the fall of 2015 and now on the eve of summer 2016 we finally know how VW will compensate US consumers. The automaker has agreed to fix or buyback almost 500,000 cars—480,000 in total—equipped with its 2.0-liter diesel engine. There is no current solution for the almost 100,000 cars sporting the larger and equally dirty 3.0-liter diesel engine. These include numerous Audis and the Porsche Cayenne. In addition each owner will also get "substantial compensation."
The compensation announcement came from Judge Charles R Breyer, who is the person overseeing all the class-action lawsuits against Volkswagen. The day before the settlement was announced rumors were floating around that owners could be given $5,000 apiece. That would substantially raise the cost of Dieselgate in the US for the German auto giant. Kelly Blue Book estimates it’ll already cost $7 billion for the buyback alone. That eats up almost all of the $7.6 billion the automaker had set aside to help pay for the scandal. Of course VW is still not out of the woods yet. There is still the possibility of criminal charges being filed in the US and the fact that it’ll need to face the music from other governments around the world as well.
The good news is that this saga appears to be coming to a close for US Volkswagen owners. The next question to ponder is where will all these former VW buyers spend their new found cash? We’ve done a bit of speculating on that issue and can’t wait to see how it shakes out. It’s not every day that you have potentially 500,000 new car buyers with pockets full of cash entering the market.