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VW Diesel Owners Want Cash Over a Fix

VW has not yet found a fix for its  diesel-powered cars and SUVs that satisfies the demands of US regulators.VW has not yet found a fix for its  diesel-powered cars and SUVs that satisfies the demands of US regulators.

Most of the owners of diesel-powered Volkswagens want the carmaker to buy back the affected vehicles instead of fixing them, according to the lawyer heading up the civil suit in the US against VW over the Dieselgate scandal.

So far, around 210,000 owners and lessees of diesel-powered Volkswagen vehicles have registered for the settlement program established to compensate drivers for their faulty vehicles, Elizabeth Cabraser, lead attorney for the plaintiffs in the suit, told Bloomberg.

That works out to nearly half of the roughly 475,000 vehicles eligible for the program.

Of the 210,000 people who have responded so far, most have expressed a preference to have Volkswagen buy their vehicles back, rather than have the carmaker fix the vehicles he said.

Practically speaking, however, it remains something of a false choice, as VW has not yet found a fix for its diesel-powered cars and SUVs that satisfies the demands of US regulators. But the company is working with the California Air Resources Board on a fix; if Volkswagen does indeed whip up a suitable solution for the affected diesels, Cabraser said, the numbers could well swing in the other direction.

Buying the cars back would be the pricier option for VW, as the terms of the settlement require the company to pay out the pre-Dieselgate value for every vehicle. Owners will also be eligible for a cash payment of at least $5,100 on top of the value of the vehicle; this money, however, also goes to drivers who choose the repair option. The carmaker has set aside $10 billion to compensate the drivers of the 475,000 affected vehicles powered by the 2.0-liter inline-four turbodiesels.

Volkswagen is required to fix or buy back at least 85% of the affected vehicles under the terms of the settlement, which was given initial approval in federal court on July 26. Final approval of the civil suit is expected on October 18.

Financialtribune.com