Half a year after an embattled Volkswagen agreed to pay nearly $15 billion in compensation to U.S. diesel owners and regulators, it’s Canada’s turn to dip into the automaker’s sooty wallet.
The company reached a deal today with the 2.0-liter diesel vehicle owners behind a class-action lawsuit. When finalized, the settlement means up to 105,000 bought-back vehicles and more cash added to the company’s penalty pile. $2.1 billion, to be exact, assuming everyone applies for a piece of the pie.
While the cash compensation has the same floor as in the U.S., the payout’s ceiling is lower.
According to CBC, the tentative deal was expected to be signed in Ontario Superior Court today, as well as in a Quebec court. The courts’ approval should come in March, after which owners can collect their loot and unburden themselves of heavily polluting vehicles.
A host of options are available to Canuck owners. First, they can rid themselves of their TDI by having the company buy it back, or have the company fix it for free. (U.S. owners are still waiting for a fix.) For those not completely soured on the brand, there’s the option of trading the old model in for a new Volkswagen.
Depending on the year, make and model, all owners can apply for cash compensation. Starting at $5,100, the payouts start at the same point as the U.S. offer, but top out at $8,000. American owners saw up to $10,000 in cash payments.
Assuming the settlement gains approval during the month of March, owners could start receiving buyout offers and payments at the end of the month. March 4, 2017 is the deadline to opt out of compensation.
Speaking to CBC, the lawsuit’s co-lead counsel, Harvey T. Strosberg, called the $2.1 billion price tag “as huge number.”
“No corporation has paid that money in Canadian history,” he said. “It is a watershed moment.”
In a statement, Volkswagen Group Canada president and CEO Maria Stenstroem said, “Volkswagen’s primary goal has always been to ensure our Canadian customers are treated fairly, and we believe that this proposed resolution achieves this aim.”
Unlike in the U.S., the government of Canada’s penalty is nowhere near as harsh. The federal Competition Bureau will fine Volkswagen Canada and Audi Canada $15 million for false environmental marketing claims. These figures do not include the crop of 3.0-liter Volkswagen Group vehicles also saddled with emissions-cheating defeat devices.
According to Reuters, a “global resolution” of 3.0-liter vehicle issues is expected to be announced tomorrow.
[Image: Volkswagen of America]
Could anyone explain to me why anyone should be entitled to receiving more than a buyback at market value or a free fix over this? ‘Cause I don’t get it.
It’s because:
a) Most owners are being forced to part with their cars, at least in the US. Paying more than market value compensates them for some of the depreciation.
b) TDIs are now radioactive, so keeping the car means you could take a hit on resale (except to other True Believers).
Like many TDI owners, I’d take the money and run to another brand – no repairs, no VW replacement vehicle.
Either you’re not especially attached to the vehicle — then take the pre-scandal market value and buy something else. No loss.
Or, you are — then have it fixed for free so that it complies to regulations, so that you can keep driving it. Should its market value take a hit, that’s the price you pay for your attachment. Your loss. Your problem.
This is how I’d see it.
I would say market value at pre-scandal prices would be fair. The owners have already gotten over by paying less at the pump due to the cheating. The owners need to be made whole but the punitive damages should be for making the rest of us whole who had to breathe the crap these things put out.
That’s what I’d have expected, yes. Thank you.
@ Big Al, Yeah but many owners purchased their TDI to pay less at the pump, paid a premium to do so and had no clue that the reason the cars performed as the did was due to illegal software.
Just think of all the pain and suffering all those owners went through who thought they were saving the planet by buying a TDI and found out that the cars polluted up to 40X the amount of the cars of all those people they shunned for killing the planet with their “dirty”, “thirsty” gas power cars. I’m sure many have been unable to sleep at night, have lost their jobs because of the stress that has been caused, ect.
My googling shows that while the value is based on trade in value there is a formula that adds a significant amount as a “restitution” payment that seems to be a bare minimum of around 3 grand.
Realistically if they were only offering trade in value a lot of folks would probably be upside down.
Anyway this isn’t the lottery and it looks like VW is making the owners whole. Now if you rolled 2 purchases worth of negative equity into your TDI and can’t pay off the loan that is your own fault. VW is in fact paying more than anyone would be able to get however short of using the car to run drugs in.
This was meant for Scott dude.
And as to keeping the car, so don’t. The courts are under no obligation to quantify your emotional attachment to your vehicle. It’s no different than the note 7 clingers. Turn it in and get something else.
Too often people see getting wronged as a lottery ticket.
Someone on the TDI forums was complaining about that the other day. Said they sold it in October 2015 once they realized how “dirty” it was, then took a bath on the sale price. Now they’re complaining about how VW doesn’t love them since they already sold the car, etc.
Because VW lied and certainly some consumers purchased their TDI based on the lie that it was so “green”. Also note VW is not buying back the cars at market value they are buying them back at trade in values at least in the US. Sure once you are done with a car most people will only get trade in value for it, though some would certainly sell it privately and get a little more. However these people are being forced to give up their car, at least in the US and thus should not be forced to take the hit of only getting trade in value when the weren’t planning on replacing their car any time soon.
If you are keeping the car the fact is you will not have the same car you purchased. Depending on the exact model and the “fix” you will end up with a car that is less economical to operate and with less performance too.
Because when you commit widespread fraud and gain financially from it, and damage your customers due to it (by having them pay extra for something that it advertised as ‘green’ when it isn’t) then, then they are allowed to sue your for damages beyond just buying back the car. This was all discussed ad nauseum when the US case wound it’s way through the courts, and none of the rationale has changed for the Canadian case. The only difference is the matter of the laws of the country.
That’s C$2.1B, or about US$1.5B.
Thank you. I’d like an evaluation of whether this is really equivalent to the US deal and equally fair to Canadian consumers, eg whether that ceiling of 8,000 Vs 10,000 is Canadian vs USD or the same currency, etc etc. I suppose that will be coming up in the next few days / weeks of analysis articles.
The Canadian maximum compensation is C$8000, which is indeed significantly lower than the US maximum.
The buy-back calculation is essentially similar.
A fair settlement? That’s a personal judgement call, but both sides’ lawyers seem satisfied.
I guess I’ll have to change my username. Daggit.
And what’s next? Golf R? Volvo V60? The Ace of Base choice – a 2.5litre Golf and save my pennies?
I only have three or four months to test drive all the cars.
There is no rush to make a decision …
Vega
“The Ace of Base choice – a 2.5litre Golf” — is that really your base model Golf? We don’t even get the VR5 anymore at all in Europe, our Golf lineup (excluding R) is comprised of 1.0 .. 2.0 TSI four-bangers.
The US 2.5L engine was an inline 5-cylinder. Neither it or the VR6 are available any longer, it’s all TSI engines here now, too.
Good point. I’ve been salivating after the R and GTI so much I haven’t paid proper attention. I think it’s a 1.8 tsi here in Canada. I tend to think getting an old beater City Golf could be as fun as anything though: leave parts where they fall, forget about the electricals, duct tape to fix the seats, etc.
1.8T for the base Golf, 2.0T for the GTI and R.
My wife is still driving her 2004 GTI 1.8T. Only minor repairs so far, and still looks and drives well. Far better than the reputation of the Mk4 models to be sure.
ive owned VAG, GM, pre-iacocca dodge M Body, and nothing will scare me from honda and toyota. especially JDM stuff.
oddly, the hecho en mexico fiat 500 abarth convertibles get my peter fluttering.IDK why.
maybe because i owned a 1981 rabbit convert hecho en wolfsberg. nicest built but worst car ever. but hey- a 10 year old watercooled volks?
thankfully around 1994ish i found forums on the net.
A Rabbit convertible would not have been hecho en Wolfsburg, but hecho en Osnabrück by Karmann.
What are you talking about? You have until Sept. 1, 2018 whether you’re in Canada or the U.S. to sell your car back. Seems like plenty of time to me.
@brettc, @th009 – Yes. It was meant sardonically….
The payout structure here in the states seems to be working out well for the people I know participating. Everyone is looking at a bizarrely large down payment on their next car, tons of time to do the shopping (not how anyone but us shops normally) and a ridiculously low cost per mile on their doomed tdi’s in the meantime. I wish all consumer scandals could have this kind of happy ending.
My big concern is that this isn’t repeatable. How many companies outside of pharma and finance can muster the credit and cash to pull off a restitution like this? The answer is distressingly few. That leads me to a distressing conclusion that while nearly perfect, I wouldn’t want to see it necessarily become a template.
The hosed vehicle owner class right now is actually broader than this, it’s takata bag owners. From what I’ve heard dealers are offering auction bait pricing to those trade ins since they can’t sell them themselves. So the other huge current auto scandal is savaging owner equity across many brands while this one is still soaking up all the attention despite/because of the happy ending.
I much prefer Christmastime in Hollis, Queens.