(Mirror Daily, United States) – Sources familiar with the matter said that Volkswagen is preparing to fork out $10.2 billion to settle the scandal sparked after it had cheated emissions tests in the U.S.
Reportedly, the money will be used to compensate 482,000 car owners that were negatively impacted by the company’s practices and pay federal penalties and fines.
Volkswagen lost credibility after the public learned that it had equipped its diesel vehicles with a piece of software called “defeat device” which turned engines’ emission controls on during tests and off on the streets.
Reportedly, Volkswagen’s rigged diesel cars produced more than 40 times the legal limit of nitrogen oxide. The compound is toxic for the human respiratory system. Car owners first learned about VW’s scheme in September. Back then, they complained that the scandal lowered their car values by a great deal.
The sources said that the company is willing to fix the cars at no cost but owners should be wary that the repairs will affect the vehicles’ fuel economy and acceleration. Drivers can also sell the affected cars back to VW.
However, the German auto maker will not use the money to compensate only customers. It will also have to pay penalties to federal and state regulators such as the Environmental Protection Agency, the Federal Trade Commission, and California Air Resources Board whose tests the company has cheated.
The sum is not final and the company’s attorneys are working on the last details.
Moreover, the two people familiar with the matter that provided the details on the case asked not to be identified because the court had issued a gag order. Official details will be made public Tuesday by a District court in San Francisco.
Still, $10.2 billion is the largest sum an auto maker has so far agreed to pay to settle a scandal. Volkswagen is expected to pay even more as more fines and penalties may emerge. The Justice Department has a pending lawsuit against the company, and California regulators promised hefty fines.
VW will also have to pay a separate $20 billion for not complying with the Clean Air Act.
General Motors’ faulty ignition switch scandal cost the Detroit auto maker $6.9 billion. However, in GM’s case about 124 people also lost their lives due to the car faults.
In VW’s case, car owners will also receive a compensation varying from $1,000 to $7,000 based on their diesel car’s age, sources said.
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