At NerdWallet, we stick to strict standards of editorial integrity that will help you decide with confidence. Many or all of the products featured here are from your partners. Here’s the way we earn money.
Loyal those who own Volkswagen diesel cars understandably felt betrayed once they learned VW?had rigged the testing tactic to bypass U.S. emissions standards. But some owners had?a big change of heart after learning how much VW would pay them to show in their cars when the proposed deal was announced in June.
For example, North park resident Mark Holthoff, a manager for a community site for used-car enthusiasts called Klipnik.com, saw the value of his 2014 Volkswagen Golf TDI plummet 30% after the “dieselgate” scandal broke in September 2015. But Holthoff’s emotions changed as he browse the the proposed $14.7 billion settlement and learned that VW would pay him $26,000 for his hatchback. It nearly matched his purchase price of $27,000 -?which meant that?”basically, we’ve got a car for free during the last 3 years.”
Not most people are pleased with the settlement, though, and?U.S. District Judge Charles Breyer – who gave preliminary approval towards the deal in June – heard objections from some owners within an Oct. 18 hearing in Bay area. He explained he’ll rule on paper?by Oct. 25 and is “strongly inclined” to simply accept the settlement, based on Reuters.
The Epa and other state and federal agencies sued VW, that has acknowledged fitting nearly 475,000 VW and Audi 2-liter diesel vehicles from the 2009-15 model years with defeat-device software to pass smog tests. Because of the settlement, individuals who thought they were buying or leasing the sporty, “clean diesel” vehicles are sorting via a complicated group of tables and charts to find out the things they is going to be paid – or waiting to see if a fix will be available to bring their cars into compliance with quality of air standards.
VW is offering “a complicated package, but it is hugely comprehensive and enables a lot of choice,” says Karl Brauer, a senior analyst at Prizes, an automotive pricing guide and information site. “There are lots of different routes, and individuals can discover which is the best for them.”
Sorting through options
With the expected?approval from the settlement, payouts could come from November. As of September, a lot more than 311,000 people have registered for that settlement and about?3,300 individuals have opted out, keeping their legal options open, according to a related Press report.
Current owners face both of these options:
- Sell the car to VW for its National Automobile Dealers Association (NADA) value -?the trade-in price for the car in clean condition, adjusted for options and mileage -? at the time the cheating was revealed on Sept. 18, 2015. The Federal Trade Commission estimates buybacks could range from $12,500 and $44,000.
- Alternatively, owners can opt to keep your diesel car and also have it ?brought up to standards for free with a fix that VW is developing. However, it’s unknown what the fix will need, and how the vehicle will perform after the inclusion of the emissions hardware.
In both cases, current owners (and some past owners) will receive a restitution payment of $5,100 to $9,800 with respect to the car’s model and year. People leasing the affected diesel vehicles?could terminate their leases without penalty and receive a restitution payment.
Some owners are disappointed, however, because the buyout amount won’t repay all of their amount borrowed.
“I loved my car, and if this hadn’t happened I would just keep driving it,” says Ron Montoya, Edmunds.com’s senior consumer advice editor, who owns a 2010 VW Golf TDI. “But I can’t pass up that much money.”
Alan Matisoff, of Huntington Beach, California, originally paid $33,000 for his 2013 Volkswagen Beetle TDI convertible. VW is providing him a settlement of $26,356, but he finds the $7,000 loss unacceptable, especially since -?at the chronilogical age of 70 -?he didn’t have a much to purchase another car.
Matisoff, who was disappointed to find that he was driving a car that exceeded pollution limits, feels slighted through the settlement. “I feel like I’ve been cheated twice,” he states.
How to maximize the settlement
The initial step for current owners of the affected VW vehicles is to find out if they are entitled to the buyout and restitution, and what the terms will be, says Kelley Blue Book’s Brauer. Eligible owners ought to be notified by mail, but they can check options by going to the VW settlement website.
To begin the buyback process, register via VW’s claims portal, which automatically adjusts for options and mileage and then totals the buyback offer. On a single webpage, a box can be?checked if a buyback is desired. Checking that box, however, is not binding -?the choice could be reversed later. And don’t forget that no terms is going to be put into motion until the money is approved.
Collect your car’s documents and hang aside about a half-hour to work through the applying process, Montoya says. Knowing the buyback figure, consider which car you can buy using the amount. Run the numbers through an car loan calculator and try different financial arrangements, perhaps using part of the buyout for a down payment and saving?the remainder to make payments.
Keep in your mind that the settlement locks within the buyback price for about 2 yrs (the deadline to submit a claim is Sept. 1, 2018). Some VW forum commenters have suggested keeping the car until right before the cash-back deadline but driving fewer miles (so they minimize the mileage deduction on their buyback price). By doing so, they’d be?driving a vehicle without paying for depreciation -?something which is usually impossible for car owners.
Montoya predicts that VW will offer you some generous “loyalty” cash-back incentives to win back customers. He’s thinking about buying another VW Golf – but this time with a gasoline engine.
Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: [email protected]
This article was compiled by NerdWallet and was originally published by The Associated Press.