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Cash on the hood: VW to pay 3.0-liter diesel owners $7K to $16K

The cash payment is similar to the compensation included in the 2.0-liter diesel settlement.

WOLFSBURG, GERMANY - APRIL 28: The logo of German automaker Volkswagen AG stands on an administrative building at the Volkswagen factory as a dark cloud passes behind on the day of the company's annual press conference on April 28, 2016 in Wolfsburg, Germany. Volkswagen is facing high costs and stiff penalties, including the possible buyback of up to 500,000 cars it sold in the USA, as a reult of VW's diesel emissions scandal. The twin car towers in the Autostadt park adjacent to the factory are 48 meters tall and have a capacity of 800 cars. (Photo by Sean Gallup/Getty Images)
Sean Gallup/Getty Images

Dieselgate is one step closer to becoming a distant memory as Volkswagen agrees to a cash compensation for owners of 3.0-liter diesel vehicles.

Volkswagen announced today that it has submitted settlement agreements with both class-action plaintiffs and the US Federal Trade Commission. The agreements are about undeclared emissions-control devices in certain vehicles equipped with a 3.0-liter diesel engine. The class-action settlement includes a one-time cash compensation for owners, with payments ranging from $7,000 to $16,000.

It's unclear when regulators will start making decisions about the efficacy of Volkswagen's proposed fixes.

Ronny Hartmann/AFP/Getty Images

Roughly 80,000 vehicles are affected by this issue, and they've been split into two groups. The first group, which includes the 2009-2012 Volkswagen Touareg and Audi Q7, covers about 20,000 vehicles. Owners of these cars will be offered a buyback or lease termination. If a fix is approved for these engines, that will be offered, as well. Buybacks include a one-time payout of $7,500 on top of the vehicle's value.

The second group includes the 2013-2016 Volkswagen Touareg, 2013-2015 Audi Q7, 2013-2016 Porsche Cayenne Diesel and several 2014-2016 diesel Audi vehicles including the A6, A7, A8, A8L and Q5. These vehicles will be subject to recall and repair once a fix is officially approved. This group will receive payouts between $7,000 and $16,000, Reuters reports. If a fix can't be found, a buyback will be initiated similar to the first group.

Volkswagen is confident that the second group of vehicles can be fixed with little more than software adjustments, even though an official fix hasn't yet been approved. If it's forced to buy back the larger chunk of vehicles, it could send the price of the whole operation into the ionosphere. VW has already agreed to spend some $25 billion in the US alone to address the fallout from Dieselgate.

This is similar to the results of the 2.0-liter diesel settlement, although the reasons for excess pollution are different. Owners of 2.0-liter diesel VW vehicles were offered a buyback or a fix, if approved, in addition to a cash payout. While the 2.0-liter settlement was already approved, this one requires final court approval, which may not happen until May.

When Volkswagen copped to deceiving both the federal government and the American public, it issued a stop-sale for all diesel vehicles in the US, an order that continues to this day. It's increasingly unlikely that Volkswagen's TDI lineup will ever return to US dealers, especially as the company prepares for a strong push into the electric vehicle market.

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