VW costs soar as US owners settle on emissions scandal

Drivers are used to experiencing the nightmare of taking a faulty car into a garage to face a fast-escalating bill with no upper limit — but today American court documents reveal that motor giant Volkswagen is facing the same problem.

VW has agreed a deal to repair or buy back, and compensate, owners of some 80,000 of its three-litre diesel-engined vehicles over its huge emissions scandal.

The files state that the bill for that alone will come to at least $1.26 billion (£1 billion) — but the documents warn that the final bill for the repair works could go above $4 billion if regulators fail to approve fixes for all of VW’s involved cars.

The car-maker’s total costs, compensation, and environmental repayments for installing software in vehicles to enable them to cheat at emissions tests is already set to come in at more than $20 billion — even more than the €18.2 billion (£15.6 billion) of provisions the German giant had set aside to cover the costs of “Dieselgate”.

The latest US settlement means that owners of three-litre vehicles who opt to get their motors repaired will receive compensation worth up to $16,500, whereas owners who opt for a buyback will get $7500 on top of the value of the vehicle.

It emerged yesterday that VW is giving its head of compliance, Christine Hohmann-Dennhardt, who was hired to help manage the aftermath of the scandal, a pay-off worth more than €10 million, despite Hohmann-Dennhardt staying with the car giant for only more than a year.

VW was this week crowned world’s biggest carmaker.