The Wayne Wright law firm brings you the latest word about Volkswagen – a giant corporation with a shameful history of cheating customers. Wayne Wright LLP is a top notch defender of those who are victims of the German auto company’s unparalleled fraud.
Long-awaited VW Settlement has been PROPOSED.
We will be laying out for the TENTATIVE offer which is currently being discussed in the federal court overseeing the Volkswagen cases. We are merely outlining for you what MIGHT happen.
THIS IS NOT A FINAL SETTLEMENT OFFER FROM VOLKSWAGEN. Anything can change in the next few months and THERE IS NO DECISION FOR YOU TO MAKE AND NO ACTION FOR YOU TO TAKE AT THIS TIME.
Does the proposal right the wrongs inflicted on unsuspecting car buyers? Safe to say it raises a number of questions about fairness. The $15.3 billion VW is offering in the settlement is the largest in automotive history. A U.S. judge is expected to make a decision on it in the coming months. But it only applies to U.S. owners and lessees of some 475,000 Volkswagens with 2-liter engines. There is no settlement proposal yet for owners of VW cars with 6-cylinder, 3-liter diesel engines that have similar emission problems. A court hearing has been scheduled for August 25, 2016 to discuss possible solutions for the 3-liter diesel VW’s.
Which route should owners take?
Many owners are deciding not to take the offer and instead hold VW accountable in court. Owners of VW’s 2-liter diesel engine cars can opt to have them fixed or sell them back to the company. Owners may have to decide whether to take the settlement or opt-out and proceed in court by as early as September of 2016. If they do not opt-out, they will likely have until late 2018 to decide which option they want—buyback or fix it. If they take the “fix-it route,” they will get several thousand dollars along with the repair but the cars’ performance and gas mileage will probably suffer and they could wait a long time for that repair. Technical fixes for the cars are still being worked out. This Class Action Settlement gives car owners a choice between a Buyback (based on pre-September 18, 2015 market value) and an Approved Emissions Modification to reduce emissions, if approved by EPA/CARB, plus a cash payment ranging, for most owners, from $5,100 to approximately $10,000 per vehicle, depending on the model and year of the vehicle. Some VW vehicles cost thousands more when they were new and their resale value has been seriously damaged. Class members who choose an Approved Emissions Modification will likely get a car with poorer fuel economy and less power than they have now. Under the Settlement, owners and lessees who choose to exclude themselves (“opt out”) from the Class Action Settlement can still pursue their own case against VW for damages and can still obtain an Approved Emissions Modification at no cost if one becomes available, but they will not be eligible for the Restitution Payments or Buyback provided for by the Class Action Settlement.
FREQUENTLY ASKED QUESTIONS ABOUT THE PROPOSED SETTLEMENT:
Which Vehicles are included in the proposed settlement?
Only the following 2.0-liter TDI diesel engine vehicles (“Eligible Vehicles”) are included in the Settlement:
|Beetle, Beetle Convertible||2013-2015|
Exactly which consumers are eligible for the proposed Settlement?
Cars sometimes change hands, so the class members are broken into three different groups: Eligible Owners, Eligible Sellers, and Eligible Lessees.
Eligible Owners: These are those people who owned an Eligible Vehicle on September 18, 2015, and still have possession of that car.
Eligible Sellers: These are those people who owned an Eligible Vehicle on September 18, 2015 and sold that same car before June 28, 2016. Note that if you sell your car on or after June 28, 2016, you will not be an Eligible Seller.
Eligible Lessees: These are people who leased an Eligible Vehicle from VW Credit, Inc. prior to September 18, 2015.
Is anybody excluded from the class settlement?
Yes, the following entities and individuals are excluded from the class:
- Owners who acquired ownership of their Volkswagen or Audi 2.0-liter TDI vehicles after September 18, 2015, and transfer title before participating in the Class Action Settlement Program through a Buyback or an Approved Emissions Modification;
- Lessees of a Volkswagen or Audi 2.0-liter TDI vehicle that is leased from a leasing company other than VW Credit, ;
- Owners whose Volkswagen or Audi 2.0-liter TDI vehicle (i) could not be driven under the power of its own 2.0-liter TDI engine on June 28, 2016, or (ii) had a branded title of assembled, dismantled, flood, junk, rebuilt, reconstructed, or salvage on September 18, 2015, and was acquired from a junkyard or salvage yard after September 18, 2015; and,
- All those people who timely opt-out of the class settlement.
What will Eligible Owners be entitled to from the Settlement?
These class members have two options: (1) have Volkswagen buy back your car (“Buyback”), or (2) wait to see whether the EPA and CARB approve a modification (“Approved Emissions Modification”) for the car’s engine type, and then decide whether to accept the modification. Class members can elect a Buyback immediately upon settlement approval, or can wait to decide between Buyback and Approved Emissions Modification options until it is determined whether a modification for their specific vehicle is approved and available.
If a class member who owns a car chooses a Buyback, the price Volkswagen will pay for that car is the September 2015 National Automobile Dealers Association (“NADA”) Clean Trade-In value of the car, adjusted for options and mileage. This figure is the value of the car in September 2015, before the emissions accusations became public (“Vehicle Value”). Owners receive their Vehicle Value, plus an additional cash payment (“Owner Restitution” or “Owner Restitution Payment”). The minimum Owner Restitution Payment for any class member—to be paid on top of the Vehicle Value—will be $5,100. Some class members may receive as much as $10,000 in Owner Restitution.
The Owner Restitution Payment is calculated at 20% of the Vehicle Value plus $2,986.73. The Vehicle Value is frozen as of September 2015, which means the car’s value will not decrease/depreciate if the class member waits before choosing a Buyback, except for an adjustment that might apply if the class member drives the car more than a standard number of miles per year. Certain owners also will be eligible for forgiveness of their car loan obligations.
An Eligible Owner who owned the vehicle on September 18, 2015, will be offered a cash payment of 20% of the Vehicle Value plus, but no less than $5,100.
An Eligible Owner who did not own the vehicle on September 18, 2015, but acquired it sometime later, will be offered a cash payment of 10% of the Vehicle Value plus $1,493.36, but no less than $2,550.
What will Eligible Sellers be entitled to from the Settlement?
Because a car may have more than one owner during the relevant period, for those cars that changed hands between September 18, 2015 and June 28, 2016, the settlement equitably divides the Owner Restitution Payment approximately 50/50 between the owner as of September 18, 2015, who later sold the car (“Eligible Seller”) and the current owner.
An Eligible Seller, who was a registered owner of an Eligible Vehicle on September 18, 2015, and sold the vehicle after September 18, 2015, but before June 28, 2016, will be offered a cash payment of 10% of the Vehicle Value plus $1,493.36, but no less than $2,550.
What will Eligible Lessees be entitled to from the Settlement?
Eligible Lessees may have their leases terminated with no termination fee, plus receive a Lessee Restitution Payment of approximately half of what a class member who owns an identical car would receive as Owner Restitution.
All Eligible Lessees will be offered a cash payment of 10% of the vehicle’s base value (adjusted for options but not mileage) plus $1,529.
Can I get benefits if my car was totaled after September 18, 2015?
If you owned an Eligible Vehicle that was functioning and operable as of September 18, 2015, but was subsequently totaled (and the title was transferred to an insurance company), you will still be eligible for benefits. There is one exception: if your car is totaled after June 28, 2016, but before the opt-out date (September 16, 2016), you are excluded from the settlement class and must sue VW for your damages.
I sold my car after September 18, 2015. Am I a class member? What are my benefits?
Class members who wish to claim benefits under this settlement, and have not already sold their vehicles, should retain them. If you sold your vehicle:
- Before June 28, 2016, you are a class member, and will receive Seller Restitution (see Question 19).
- Between June 28, 2016 and September 16, 2016, you are not a class member, you are not eligible for settlement benefits, you are not bound by the Class Action Settlement, and must sue VW to recover your damages.
- After the September 16, 2016 opt-out deadline, you are bound by the Class Action Settlement but are not eligible for settlement
I bought my car after September 18, 2015. Am I a class member? What are my benefits?
If you bought your vehicle after September 18, 2015 and still own it, you are a class member, and you are entitled to settlement benefits. If you sell your vehicle before Volkswagen buys it back or modifies its emissions system, however, you will not receive any benefits under the Class Action Settlement.
Can I still participate in the Class Action Settlement if I took part in the Volkswagen or Audi Goodwill Program?
Yes, participation in Volkswagen’s or Audi’s Goodwill Programs does not affect whether you are included in the Class Action Settlement. Any Goodwill Program Payment you received will not affect the amount you are entitled to receive under the Class Action Settlement.
How does continuing to drive my car affect my compensation?
Continuing to drive your car an average of 12,500 miles per year (around 1,000 miles per month) or fewer will not reduce your compensation under the Class Action Settlement. Adjustments for driving more or fewer than 1,000 miles per month going forward will be based on NADA mileage tables.
May I still drive my car if I do not have the emissions system modified? Will my car pass my state’s emissions testing?
Yes. For now, you may continue to drive your vehicle without modifying the emissions, regardless of whether it would fail a state inspection. However, individual states might require Approved Emissions Modifications on Eligible Vehicles at some point in the future.
Can I participate in the Buyback option if I have an outstanding loan on my vehicle?
Yes. Your payment will be based on the amount of your outstanding loan as follows:
- If your outstanding loan balance is less than the Vehicle Value plus Owner Restitution, Volkswagen will pay off your loan and pay you the
- If your outstanding loan balance is between 100% and 130% of the Vehicle Value plus Owner Restitution, Volkswagen will pay off your loan in
- If your outstanding loan is more than 130% of the Vehicle Value plus Owner Restitution, your loan will be paid off up to 130% of the Vehicle Value plus Owner Restitution (see Question 19). You must pay any remaining loan balance necessary to transfer ownership of the vehicle to Volkswagen to complete the Buyback
What is the Approved Emissions Modification option?
Under an agreement between Volkswagen and the EPA, Volkswagen may submit proposed emissions modifications for each type of affected 2.0-liter engine. The submission, testing, and approval processes take time, so class members may not know whether their cars have an Approved Emissions Modification immediately upon final approval of the settlement, and possibly not until May 1, 2018.
If the EPA approves them, the Emissions Modification option allows owners and lessees to keep their vehicles and to have their emissions systems modified at Volkswagen’s expense. However this will result in poorer fuel mileage and reduced performance and may result in reduced reliability, durability and driveability as well as an increase in noise vibration and harshness.
Do I give up my rights if I accept the Class Settlement?
Yes. You will be required to forever release your claims against Volkswagen if you accept the settlement offer.
How do I opt-out of the Class Settlement?
At the appropriate time the Court will set the rules for to opt out. But generally it will include sending a written notice that you are opting out.
Is there a handy summary of my options for me to review?
Yes. Below is a summary chart of your options.
|Category||Definition||Benefit Options||Restitution Payment|
|Eligible Owner||Registered1 owner of an||(1) Buyback||20% of the Vehicle|
|(bought car on or||Eligible Vehicle at the time||Vehicle Value2 + Restitution||Value2 + $2,986.73|
|before September||of Buyback or Approved||Payment3 + Loan Forgiveness if|
|18, 2015)||Emissions Modification.||applicable4||$5,100 minimum|
|OR (if approved)|
|(2) Emissions Modification|
|Modification to your car to|
|reduce emissions + Restitution|
|Eligible Owner||Registered1 owner of an||(1) Buyback||10% of the Vehicle|
|(bought car after||Eligible Vehicle at the time||Vehicle Value2 + Restitution||Value2 + $1,493.365 + a|
|September 18,||of Buyback or Approved||Payment3||proportional share of any|
|2015)||Emissions Modification.||OR (if approved)||restitution not claimed by Eligible Sellers|
|(2) Emissions Modification|
|Modification to your car to||$2,550 minimum|
|reduce emissions + Restitution|
|Eligible Seller||Registered1 owner of an Eligible Vehicle on September 18, 2015, who transferred vehicle title after September 18, 2015, but
before June 28, 2016.
|Restitution Payment||10% of the Vehicle Value2 + $1,493.365
|Eligible Lessee (currently leases car)||Registered1 lessee of an Eligible Vehicle, with a lease issued by VW Credit, Inc., at the time of early Lease Termination or Approved Emissions Modification.||(1) Lease Termination Early termination of the lease without penalty + Restitution
OR (if approved)
(2) Emissions Modification Modification to your car to
reduce emissions + Restitution Payment5
|10% of the Vehicle Value2 + $1,529.005|
|Eligible Lessee (formerly leased car)||Registered1 lessee of an Eligible Vehicle, with a lease issued by VW Credit, Inc., who returned the Eligible Vehicle at the end of the lease on or after September 18, 2015.||Restitution Payment5||10% of the Vehicle Value2 + $1,529.005|
|Eligible Lessee (now owns car)||Registered1 lessee of an Eligible Vehicle, with a lease issued by VW Credit, Inc., who purchased the Eligible Vehicle after June 28, 2016.||Emissions Modification Modification to your car to reduce emissions + Restitution Payment5||10% of the Vehicle Value2 + $1,529.005|
- Vehicle registrations for owners/lessees will be verified by records of a state Department of Motor Vehicles or an equivalent agency.
- For Eligible Owners, Vehicle Value is based on pre-September 18, 2015 market value adjusted for options and mileage. For Eligible Lessees, Vehicle Value is based on pre-September 18, 2015 market value adjusted for options but not mileage.
- The Owner Restitution Payment is the same whether you choose a Buyback or an Approved Emissions Modification.
- Loan Forgiveness might be available for Eligible Owners who choose a Buyback and who owe more on their vehicle than they will receive as Vehicle Value plus Owner Restitution.
- The Lessee Restitution Payment is the same whether you choose a Lease Termination or an Approved Emissions Modification.