Volkswagen would repair or buy back polluting diesel vehicles and pay each owner as much as $10,000 under a $14.7 billion deal the car maker has reached to settle lawsuits stemming from its emissions cheating scandal, a person briefed on the settlement talks said Monday. The figure would be the largest auto scandal settlement in US history and a huge step in Volkswagen's efforts to address the legal fallout from its admission that its vehicles were designed to fool emissions tests, the AP reports. The deal sets aside $10 billion to repair or buy back roughly 475,000 polluting Volkswagen vehicles with 2-liter diesel engines, and to compensate each owner with an additional payment of between $5,100 and $10,000, the person said. The person asked not to be identified because the deal will not be filed in court until Tuesday, and a judge has ordered attorneys not to talk about it before then.
How VW would repair the vehicles to bring them into compliance with clean air laws has not yet been finalized, the person said. Owners who choose to have VW buy back their cars would get the clean trade-in value from before the scandal became public on Sept. 18, 2015. The average value of a VW diesel has dropped 19% since just before the scandal began. In August of 2015, the average was $13,196, and this May it was $10,674, according to Kelley Blue Book. The settlement still requires a judge's approval before it can go into effect. Owners can choose to decline Volkswagen's offer and sue the company on their own. The settlement also includes $2.7 billion for environmental mitigation and another $2 billion for research on zero-emissions technology, the person said. VW is still facing billions more in fines and penalties over the emissions scandal, a lawsuit by state attorneys general, and potential criminal charges. (Read more Volkswagen stories.)