10.21.16 - Volkswagen Dealership

Volkswagen May Be Closing in on the Final Stages of the Settlement

Volkswagen would love nothing more than to put the entire diesel scandal behind them and move forward with their new line of vehicles along with those that have sold well for the brand over the past several years. This could be coming sooner than you might expect, only twelve months after the scandal was revealed publicly Volkswagen has finalized it settlement numbers with their own dealer network to help offset the losses each dealership would have felt during this scandal. Considering VW was on the verge of record numbers for the year, this settlement isn’t an inexpensive affair, but it certainly allows VW to remain relevant and have a loyal sales force in the US.

The settlement with the VW dealers in the US amounts to $1.21 billion which, when divided among the 652 dealers comes out to be $1.85 million per dealership. This payout will be spread out over the next eighteen months and help VW regain the loyal sales force they’ve enjoyed having for many years. This certainly puts a somewhat finishing touch on what VW will need to do to make up for the scandal, at least in the eyes of the dealers.

As for the customers that own the 2.0-liter TDI models, out of the 475,000 of these customer, 311,000 of them have already opted for the customer settlement using the buyback option. This means VW will have to pay these customers the pre scandal price along with an additional amount of money which owners can put toward a new vehicle from VW or take the money and go elsewhere to find their next vehicle.

The hope that VW had in having a fix that would satisfy customers and the EPA regulations hasn’t come to fruition. So far the fixes that have been presented haven’t been approved and at least 85 percent of these vehicles are required to be fixed or removed from the road by June 2019. This gives VW some time, but it seems they working toward putting this scandal behind them as quickly as possible to allow the company to move forward. Even though it seems VW is still making progress, they’ve halted all projects that weren’t deemed “absolutely necessary” which takes all the fun out of being an automaker. So far the only fixes offered come within some tolerances of the emissions regulations, but levels are still much higher than on other models on the road.

Even though it appears the VW scandal could be coming to a close, there are 3,300 owners who have opted out of the settlement offered and have instead chosen to enter into a class action lawsuit against Volkswagen.

As of now, a federal judge can sign off on the settlement offered on October 18 now that the settlement to dealers and owner has been approved. This dealer agreement also allows VW to buyback any unsold diesel vehicles that remain on the lot and capital improvements that were requested by the automaker are now suspended.

While it seems as if we are coming to a close, the 3.0-liter diesel models haven’t even been discussed with a fix or settlement yet, and as you can see lawsuits and some customers still remain in limbo as VW looks to come to a fix on all affected vehicles in the next few months.

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