Regarding several of the recent posts as well as the rumored $5,000 “additional compensation.” After following (suffering through?) Threadzilla for 7 months now, I thought I would finally chime in with my 2 cents. Disclaimer: this is speculation and others may have already made some of these points.
The “additional compensation” has two components:
1) for the EPA and CARB, part of the amount serves as an incentive to get the cars either modified or off the road (through buyback). The incentive has to be great enough to encourage a high percentage of TDI owners to assent to one of these options. Note that EPA and CARB don’t want to play the bad guys—they would prefer that vehicles be brought in voluntarily through incentives rather than telling owners that registrations won’t be renewed;
2) for the class-action plaintiffs, part of the amount serves to compensate members of the class for financial harm caused by VW’s illegal and deceptive practices, including loss of vehicle value; potential performance or fuel economy impacts from vehicle modifications (if owners choose that route); and what I call “limbo impacts,” the direct financial harm or inconvenience from the uncertain status of the vehicle since news of the scandal broke. Examples of “limbo impacts” on this forum include being unable to trade-in the vehicle or delaying a needed but expensive vehicle repair. I had to buy my wife a new vehicle in January and was refused trade-in of my Golf TDI due to the diesel scandal. A trade in at the pre-scandal value of about $15,000 would have saved me $1,500 in sales tax on the new vehicle—an example of direct financial harm.
I expect that the incentive part of the additional compensation may be a fixed amount for each vehicle or will vary based on their future pollution potential, essentially, related to the question “how much does EPA/CARB want to get that particular vehicle off the road?” This could vary between Gen 1, Gen 2, and Gen 3, and could also be less with high-mileage vehicles, with the assumption that they don’t have many years of life left to pollute. The current owner of record would be allowed to claim the incentive compensation within the period allotted in the final settlement.
Regarding the class-action part of the additional compensation, as with any class action settlement, there has to be a definition and categorization of the “class,” that is, who was impacted by the illegal or deceptive actions of the defendant, and to what extent. Compensation can and does vary greatly among members of a class. I would expect a breakdown of the VW class based on 1) whether vehicle was purchased new or used, 2) when the vehicle was purchased, and 3) pre-scandal vehicle value (accounting for miles and possibly condition). A couple of extreme examples: someone who buys a used 2009 Jetta TDI tomorrow in anticipation of a buyback and generous additional compensation may receive less than someone who bought a new Passat last July. The individual who buys the 2009 Jetta tomorrow hasn’t suffered financial harm due to VW’s illegal and deceptive practices—given the information that’s come to light since September, including admissions of guilt by VW, they know exactly what they are buying and it should be reflected in the price. Likewise, the owner of a 2009 Jetta with 200K miles would receive less than the owner of a 2014 Jetta with 30K miles. Why? The original owner of a 2009 Jetta with 200K miles has incurred less harm—they’ve driven the vehicle they bought, unmodified, for nearly 8 years, virtually exhausting its useful life.
The definition and categorization of class gets sticky when talking about someone who panic-sold their TDI in November for a fraction of its pre-scandal value. Who is in the class, the seller or the buyer? Can both be members of the class? How would their additional compensation vary? These are the types of issues that will be ironed out over the next 2 months. For debate purposes, I’ll stick my neck out and say that the class-action compensation would go only to owners of record at the time the scandal broke, with some special allowances for individuals who bought their vehicles shortly thereafter. They would be the only individuals who could claim harm by VW’s deception.
