VWs $14.7 billion settlement leaves dealers with questions

VWês $14.7 billion settlement leaves dealers with questions

The size of the record $14.7 billion settlement Volkswagen reached with the EPA surprised many observers. The automaker agreed to pay nearly $10 billion to customers to buy-back the 475,000 vehicles affected by the non-compliant emissions equipment scandal; $2.7 billion into an environmental mitigation trust fund; and $2 billion for research on zero-emission vehicles.

But what about Volkswagenês U.S. dealer network? Although VW has started to work with them, many unanswered questions remain. Dealers will have to fix any of the affected vehicles that owners decide to have repaired. But VW might not even submit a repair to the EPA until at least November, according to the Associated Press.

Edmunds.comês Jessica Caldwell told the Detroit News it will be a long time before consumers trust Volkswagen as an environmentally friendly brand again. Dealers will be the ones who suffer the consequences. U.S. sales are already down 13 percent through May. And dealers will be working with an automaker that might not be in great financial shape, especially if the ongoing criminal investigation amounts to anything.

Then thereês the matter of tainted inventory on dealersê lots that they canêt sell. In some cases, dealers have been told the automaker will pay only 40 percent of the value before the emissions scandal surfaced, according to the New York Times. Volkswagen has not said whether it will offer to buy-back the vehicles from dealers once a repair has been approved.

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