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Volkswagen is giving owners $500 amid scandal

Posted at 12:52 PM, Nov 09, 2015
and last updated 2015-11-09 12:52:53-05

NEW YORK — After apologizing for two months, Volkswagen is finally putting its money where its mouth is, forking over $500 to VW car owners hit by its emissions cheating scandal. The payment will come in the form a gift card that can be spent anywhere. They’ll also get another card worth $500 that can only be spent on purchases or services at VW or Audi dealerships, as well as free 24-hour roadside assistance for the next three years.

It’s the first time owners have been compensated by the German automaker, which admitted in mid-September that its cars use software designed to cheat emissions tests.

“We are providing this goodwill package as a first step towards regaining our customers’ trust,” said Michael Horn, the head of VW’s U.S. operations.

VW is still trying to determine how to fix 500,000 diesel Volkswagens and Audis in the U.S. to bring them into compliance with federal emission rules. But so far it has resisted calls from Congress and by some car owners to repurchase the vehicles from unhappy consumers.

The company says about 11 million cars worldwide have the deceptive software, but this offer is only for U.S. customers.

The gesture will cost Volkswagen nearly $250 million — a fraction of what the automaker has warned investors the scandal will costs. It said in September it had set aside $7.3 billion to deal with fixing the problem, which caused the company to report a third quarter loss.

Last week it admitted that it also it understated the fuel mileage and carbon dioxide emissions for another group of diesel cars, which it said would cost about it another $2.2 billion. It also faces more than $18 billion in fines from U.S. regulators for violating the Clean Air Act.

Customers eligible for the VW payment are owners of the diesel cars that were initially cited by the EPA. That includes the diesel versions of the VW Jetta, the Beetle and the Golf from model years 2009 through 2015, the Passat from 2014-2015. Owners of the Audi A3, model years 2009-2015, will be compensated with a similar package to be announced soon. Audi is the luxury unit of Volkswagen AG.

But owners of the 3-litre diesel engines which were cited last month by the EPA for also cheating on emissions tests are not eligible for the offer. VW has denied those cars have software meant to deceive emission tests.

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