Volkswagen will buy back some diesel cars, modify others

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After over six months, Volkswagen and the U.S. government have agreed on a plan to address the nearly 600,000 diesel cars equipped with illegal “defeat device” software that allowed them to cheat on emissions tests.

The preliminary deal includes both buyback offers and plans to modify at least some diesel cars to comply with emissions standards. Owners will have to option to have their cars recalled, or have VW buy them back. Consumers currently leasing affected vehicles will be able to cancel their leases.

It was reported yesterday that Volkswagen was prepared to buy back up to 500,000 cars, but that figure wasn’t specifically mentioned in the announcement from a California court. There are an estimated 567,000 cars in need of a buyback or fix, including models from Volkswagen, Audi, and Porsche. VW also hasn’t said exactly how it plans to modify cars in a way that will satisfy regulators.

The settlement also calls for compensation for individual owners, but exact amounts will be decided at a later date. Spending will be capped at $1 billion, according to the Associated Press. That works out to about $1,700 per car, although certain owners may get more money than others. Owners of older cars that need to be extensively modified, for example, might get more cash than owners of newer vehicles that only need software changes.

A third component of the settlement is a fund for “appropriate remediation efforts,” for the excess emissions produced by its cars, and fund promotion of “green automotive technology,” reports Road & Track. Volkswagen likely faces government fines as well. A maximum amount for these was previously estimated at $18 billion, but the actual amount may be lower.

Volkswagen and the government have until June 21 to turn the preliminary agreement into a final “consent decree,” which will be made available for public comment before taking effect.

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