Dieselgate to Set VW Back $14.7 Billion

2014 Volkswagen Touareg TDI badge (Credit: Volkswagen )

Everyone knew that Volkswagen was going to be in a whole world of hurt from the dieselgate scandal as deceiving customers and federal agencies is slightly frowned upon. Today, we can finally attach a price tag to cheating as the German automaker and federal regulators have announced the overall cost of making things right again.

Initial estimates were in the $10 billion range, but the specifics of the settlement pushed the final total to a whopping $14.7 billion. $10.03 billion of that money will go toward buying back and compensating owners of 2009 through 2015 models with 2.0-liter TDI engines in the U.S. The other $4.7 billion will go toward mitigating the pollution from these engines and investing in green-vehicle technology.

The $4.7 billion that will go toward mitigating the emissions issues is likely the biggest issue at this point as VW has yet to officially announce a repair for the diesel cheat. However, given there is a price tag affixed to it, I suspect that Volkswagen has a few ideas on the table and is just waiting on the fed to sign off on one of them.

The buyback option will cover the value of the vehicles as of September 2015, which is right before the scandal went public, and will run between $12,500 and $44,000 per vehicle, depending on the model, mileage, trim level, and region. Buyers who owe more than the vehicle is worth will have the balance of their loans forgiven by VW. For those in the same situation but financed their vehicles through a third party, VW will offer up to 130 percent of the car’s value to pay off the loan.

Sadly, there is will no deal on the table for owners of the 3.0-lter TDI engine, but that should come fairly quickly now that this deal is in place.

We’ll bring you more updates as they become available.