It’s not the way Volkswagon wanted to make history in the United States.
The German automaker involved in the biggest auto car scandal in American history, a landmark which will cost them somewhere in the neighborhood of $15 billion.
This after a U.S. federal judge approved the settlement of most claims against the car manufacturer due to a half a million vehicles which were programmed to cheat on emissions tests.
475,000 VW and Audi owners with two litre four cylinder diesel engines can now choose between a buy back of up to $10,000, or cheap fix, starting next week.
Under terms of the settlement, owners of the affected cars have until Sept. 1, 2018, to decide whether to have the car fixed or repurchased.
It’s anticipated that most owners will take the buy back option considering the models exceed U.S. emissions standards in real-world driving conditions. The buy back option also includes potential cash payments of $5,100 to $10,000 for some.
In addition, the decision means VW will have to suck up $324 million in legal fees and $8.5 million in out-of-pocket costs. The automaker is still not out of the woods legally, as the compensation does not include larger 3-litre six-cylinder diesels, which also cheated on tests.
The history making scandal involved software activated into the models in question which purposely recognized when cars were being tested on a treadmill and turned on pollution controls. The same controls would turn off when the cars returned to the road. The EPA says the scheme let the cars spew more than 40 times the allowable limit of nitrogen oxide.
The scandal has affected VW Group’s sales in the U.S. Through September, transactions were down nearly 7 per cent compared to 2015 figures. The Volkswagen brand taking the brunt of it, with sales down 12.5 per cent to just over 231,000 units, according to Autodata Corp.