VW buybacks to begin under US$14.7b diesel test cheating accord

San Francisco

VOLKSWAGEN AG and drivers suing the company in the US over its diesel-cheating scandal have won final approval of their US$14.7 billion settlement to resolve what's likely to be the largest portion of VW's civil liability worldwide.

The accord requires VW to buy back cars with 2-litre diesel engines armed with so-called defeat devices used to beat emissions tests. Under the deal VW reached in June with consumers and regulators including the US Environmental Protection Agency (EPA) and the Federal Trade Commission (FTC), car owners will be offered US$5,100-10,000 each in compensation along with the option of a buyback or a fix.

The carmaker has earmarked US$19.5 billion to cover costs stemming from the scandal. With Tuesday's approval by US District Judge Charles Breyer in San Francisco, VW has committed to almost US$16.6 billion in settlements, including US$1.2 billion for US franchise dealers and US$603 million to California and 43 oth…