VW Emission Fiasco – Who Pays?

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Written By Mostafa Moradi

Volkswagen’s reputation as a quality car maker is unwinding day by day as new revelations about cheating emission tests emerge – but who pays for the fiasco?

So far, the firm has admitted about 1.2 million diesel cars in Britain are affected by the false emission testing software implanted in the vehicles.

They include Volkswagen cars and vans, plus other marques belonging to the group, including Audi, Seat and Skoda.

Many drivers are wondering whether they are entitled to compensation and if they are due tax bills based on verified emissions rather than read-outs from the faulty software.

Other questions that remain unanswered include will car values be affected and were drivers misled about the vehicles by dealers when buying cars based on the emission read-outs?

Law suits

In the US, lawyers are drafting class actions against VW on behalf of angry owners.

In the UK, law firm Slater and Gordon has revealed around 500 VW owners have contacted them seeking compensation from the car company.

Road tax in the UK is based on vehicle emission data, and drivers want to know whether HM Revenue & Customs (HMRC) will chase them for extra tax when testers have worked out whether the software was only designed to trick the stricter US emission rules or those in other countries as well.

Unfortunately, the VW scandal is not the only one to hit the motor trade in recent years.

Toyota and Lexus cars were recalled because of safety defects six years ago, but a spokesman for the in-trade CAP Black Book that tracks used car prices, says the episode had no significant impact on values.

Car values

The firm says how the emissions problem will affect car values remains to be seen, but does not expect any major problem for owners.

Whatever the compensation repercussions are for VW, which has put aside £4.5 billion to put right the 11 million cars worldwide caught in the scandal, the regulatory cost is likely to hit much harder.

The US Environmental Protection Agency, which revealed how VW rigged emissions tests, has the power to fine the company up to £25,000 per defective vehicle. With at least 500,000 cars under scrutiny in the US, the maximum fine could top £11.5 billion.

Other trading standards and environmental authorities across Europe and the rest of the world are also lining up action against the company.

Counting the cost of the emissions scandal leaves VW with a bigger problem after all the fines and compensation are paid – repairing a tattered reputation.