DETROIT – Volkswagen is agreeing to settle consumer lawsuits and government allegations that it cheated on emissions tests by taking steps that will cost the company $14.7 billion.
Terms of the settlement were revealed Tuesday in orders filed with the U.S. District Court in San Francisco.
"For years, Americans have been buying cars manufactured by Volkswagen thinking that their vehicles complied with federal pollution standards. But as VW now acknowledges, hundreds of thousands of cars the company sold in this country were in fact pumping illegal levels of nitrogen oxides into our atmosphere -- up to 40 times more than what federal law allows," Deputy Attorney General Sally Q. Yates said at a news conference. "And as Volkswagen now admits, these vehicles were equipped with software that masked the true amount of pollutants the cars released while on the road, ensuring that regulators failed to detect the problem during environmental testing."
VW will pay just over $10 billion to either buy back the cheating diesel vehicles or repair them. It also will pay owners from $5,100 to $10,000 for their trouble. The German company also has to pay governments $2.7 billion for environmental mitigation and spend another $2 billion for research on zero-emissions vehicles in the U.S.
"By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment," Yates said.
Lawyers say it's the largest auto-related consumer class-action settlement in U.S. history.
Many consumers are expected to choose the buyback option.
The settlement states that the company must buy back any any affected 2.0-liter vehicle at its retail value as of September 2015, just prior to the public disclosure of the emissions issue.
Those who choose the buy back option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased.
Click here to search by vehicle identification number (VIN) whether a vehicle is included in the proposed settlements.