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Volkswagen To Compensate U.S. Dealers For Emissions Debacle

Aug 31, 2016

Volkswagen has reached an “agreement in principle” to compensate its 650 U.S. Volkswagen dealers for damages sustained by their businesses following the company’s diesel emissions scandal. The deal is subject to court approval and many details are still being negotiated. A final settlement proposal must be submitted for court approval by September 30, 2016.

Media reports say the deal could be worth more than $1.2 billion and, under the terms of the preliminary agreement, dealers will receive a cash payout from a settlement fund within 18 months. In addition, Volkswagen has agreed to repurchase “unfixable, used” diesel vehicles from dealer inventory under the same terms as buyback offers for consumers according to media reports.

Dealer payouts will be determined by a formula that is being finalized and will be announced in the coming weeks. Individual dealer payouts will vary based on the size of the dealership and its market, among other factors.

The agreement will become effective only after approval by the U.S. District Court of Northern California. Affected dealers do not need to take any action at this time. Volkswagen has stated that the agreement, when finalized, will strengthen its relationship with its dealers, and has emphasized its commitment to them and U.S. consumers.

Separately, the company is moving forward with the logistics of its $15 billion settlement with consumers and government agencies. This agreement states that the company will compensate owners of its 2.0-liter diesel vehicles, buy back vehicles equipped with illegal software and fund environmental programs. The settlement program will begin as soon as the court grants final approval to the class settlement, which is anticipated to occur on October 18, 2016. For additional information about the proposed 2.0L TDI settlement program, please visit

Volkswagen is also working with U.S. regulators to reach an agreement on settlement regarding 85,000 affected 3.0L V-6 engine TDI vehicles, which may include a buy-back offer for those Porsche, Audi and Volkswagen vehicles. Volkswagen must submit its specific plans to fix the 3.0-liter vehicles by late October.

NJ CAR will update members about further developments with the settlement process, as they become available.