With a massive recall of faulty Takata airbags, and Mitsubishi admitting to cheating on its fuel economy figures, this year hasn’t been great for the integrity of the automobile industry. Let's also not forget the ongoing battle between Volkswagen and the Department of Justice due to their 'defeat device' emissions cheating scandal. This matter has been under investigation since September 2015, yet the cheating was said to have begun almost 11 years ago in 2005. Volkswagen will have to recall almost nine million cars in Europe, and a total of 500,000 vehicles in the US, including non-VW makes owned by the Volkswagen Group, like Audi and Porsche.
While waiting for the Department of Justice to come to a decision on penalties and fines, Volkswagen reported a record financial loss for 2015. Volkswagen set aside more than $18 billion to cover the cost of fines, legal claims, and all the recalls in the United States and other countries. This means that 2016 will likely result in a major financial loss for Volkswagen as well. The company has agreed on a plan to settle some legal claims in the United States. The plan includes giving the owners of the above mentioned 500,000 affected vehicles the options to sell their cars back to Volkswagen or repair them. However, between, the penalties and fines this could just be the beginning of Volkswagen’s problems.
What Actually Happened?
Volkswagen has promoted clean diesel in an attempt to attract more environmentally conscious consumers. According to the New York Times in August 2015, vehicles with diesel engines accounted for more than 23 percent of the Volkswagen brand cars sold in the United States. So the bad news was finding out that these "so-called" clean diesel cars were not actually clean at all. But instead emitting up to 40 times the allowed amount of nitrogen oxide. This information was discovered by researchers at West Virginia University. After initially denying the university’s findings, Volkswagen later admitted that 11 million cars had software installed that sensed when the car was being tested, and when the car was being tested it would fully utilize its emissions controls, so that emissions were below the legal limits. Once the car was on the road, the equipment would turn off and the vehicles would emit large amounts of nitrogen oxide.
What Cars Are Affected?
- 2009-2015 VW Jetta
- 2012-2015 VW Beetle and Beetle Convertible
- 2012-2015 VW Passat
- 2010-2013 Audi A3
- 2009-2014 VW Jetta SportWagen
- 2010-2015 VW Golf
- 2015 VW Golf SportWagen
- 2009-2016 VW Touareg
- 2014-2016 Audi A6 Quattro
- 2014-2016 Audi A7 Quattro
- 2014-2016 Audi A8 and A8L
- 2014-2016 Audi Q5
- 2009-2016 Audi Q7
- 2013-2016 Porsche Cayenne
How will this Impact Consumers?
If you have one of these car models and you haven’t received any prior notification, contact your local Volkswagen dealership or the dealership where you purchased your car and see if you're affected. Do you already know that your car's affected, and now you're worried about what to do? Or the repercussions if you decide not to get your car fixed? No worries at all! Car owners are not obligated to get their cars fixed if they don’t want to. But it is a good idea because if you don’t it could negatively affect your warranty. Also if you don't repair it, and try to resell it, the value will be much lower than if it’s repaired.
All that information doesn't sound great. Especially when you paid for an environmentally friendly car and ended up with the complete opposite. Which is why if you’re not interested in a repair, Volkswagen has said they will buy back the affected cars. Although the type of car you drive has a major impact on your insurance rates, the drivers affected by the Volkswagen scandal have nothing to worry about in the insurance department. Colin Harvey, senior motor underwriting manager at Aviva, told the Telegraph: “Our car insurance customers can be reassured that there are no implications for their insurance and they will continue to be covered as usual." This includes customers who decide against repairing their cars.