Volkswagen Dealers To Receive $1.85M Each In “Dieselgate” Settlement

Image courtesy of Eric Arnold

The final pieces of Volkswagen’s efforts to put the “Dieselgate” scandal behind it are beginning to fall into place, as a judge approved yet another billion-dollar settlement from the carmaker, this time relating to compensating dealers affected by the carmaker’s decision to equip more than 500,000 vehicles equipped with “defeat devices” used to skirt emission standards. 

U.S. District Court judge Charles Breyer approved the deal [PDF] — which was first discussed in Aug. 2016 — that will see 652 U.S. dealers receiving an average of $1.85 million over 18 months.

The settlement, valued at $1.6 billion, will allow dealers to put off capital improvements for two years, while also receiving volume-based incentive payments from Volkswagen.

Additionally, VW will be required to buy back any vehicle equipped with a defeat-device that can not be fixed. VW must pay the dealer what any consumer would have been eligible to receive for the buyback, per a previously announced settlement with the U.S. government.

The settlement is intended to provide compensation for any economic damage dealers suffered following the September 2015 reveal that the carmaker has equipped hundreds of thousands of vehicles with devices designed to cheat emissions tests.

Shortly after the Environmental Protection Agency and California Air Resources Board revealed that VW’s diesel-engine vehicles contained defeat devices, the carmaker ordered dealers to stop selling affected vehicles until the issue was fixed.

This, VW dealers, claimed in a lawsuit filed in April 2016, “caused great harm to franchise dealers whose profits have been erased and whose dealerships have plummeted in value due to the inability to sell tens of thousands of affected vehicles.”

VW previously announced a tentative settlement with dealers in August, noting that details would be released once the deal was approved by the court.