Sean Gilpatrick has been driving Volkswagen cars since he got behind the wheel of his 1971 Super Beetle at 16.
Now more than two decades later, Gilpatrick drives a 2010 Jetta with a diesel engine – one of the 2-liter diesel engines deliberately programmed to cheat government emissions tests. He also works as the sales manager of AutoServ Volkswagen in Tilton, so he’s been the person fielding calls from customers like himself who own affected vehicles.
Even as the news broke Tuesday about a multi-billion dollar settlement for consumer lawsuits, Gilpatrick’s enthusiasm for the Volkswagen brand hasn’t wavered. In fact, he said, only “a very small minority” of customers have told him they won’t return.
“Generally the people I’ve found have been most offended are the people who decided to buy the car primarily because they thought they were buying something super clean,” Gilpatrick said. “Those people feel that they were completely duped. They will probably never go buy another Volkswagen again.”
The settlement terms were revealed in federal court in California in what lawyers are calling the largest auto-related class-action settlement in U.S. history. In total, Volkswagen will spend more than $15 billion across the country. The proposed agreement calls for VW to either buy back or repair about 475,000 vehicles with illegal engines. The company will also compensate owners with payments ranging from $5,100 to $10,000, depending on the age of their vehicles. Cars made between 2009 and 2015 have been affected.
As part of the deal, VW will pay New Hampshire up to $35 million total – approximately $6.1 million to settle Consumer Protection Act violations and up to $29 million in environmental mitigation. Like in other states, owners will receive restitution, and they can also request the company fix or buy back affected vehicles.
As part of the settlement, 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 percent since just before the scandal began. In August 2015, the average value was $13,196; this May it was $10,674, according to Kelley Blue Book.
The $6.1 million payment for consumer claims is partially based on the number of vehicles sold or leased; in most cases, states will receive approximately $1,000 for each one. The attorney general’s office said New Hampshire will receive an additional $340,000 because it was part of the group’s multi-state executive committee.
“These settlements are the result of Volkswagen’s efforts to cheat on its emissions testing by tampering with the emissions control devices on approximately 575,000 vehicles nationwide – over 5,000 of which were sold or leased in New Hampshire,” Attorney General Joseph Foster said in a press release.
Two of those cars belong to Arne Godtfredsen and Heidi Foster, a married couple living in Hollis. Godtfredsen drives a 2015 Golf SportsWagen; his wife, a 2010 Jetta SportsWagen. He likes the car – the way it drives on the highway, the gas mileage – but he was disappointed when he first heard about the scandal.
“I thought it was pretty sly,” Godtfredsen said of the cheating engines. “I know the Germans are creative, but that’s too creative.”
Soon after, he said, Volkwagen sent an apologetic letter and two $500 credit cards to him and his wife. Now, his car can likely be fixed to comply with the appropriate standards, because it is a newer model. Her car is too old to be repaired, so she’ll likely ask the company to buy it back. In addition, they’ll be entitled to restitution payments.
And both will likely buy a VW again – maybe even a diesel, Godtfredsen said, if the company fixes the engines.
“I’m disappointed they lied, but they’re paying a price for it,” he said.
The couple purchased their cars at the Tilton dealership where Gilpatrick works. He estimated the diesel cars made up 25 to 30 percent of his business since 2012, which would account for about 250 sales in the last four years. The salesman said he is glad VW is offering compensation to affected owners, and he hopes VW offers deep discounts for new models to incentivize buyers, especially as thousands return their cars to dealerships.
“How can we turn this horrible nightmare into a fantastic opportunity to sell a whole bunch of cars for people?” he said. “A year from now, people will be talking with their friends, ‘Boy, did they really turn around and make me feel special?’ The tarnish on the brand image will be gone and hopefully be turned around.”
VW is still facing billions of dollars more in fines and penalties as well as possible criminal charges. Lawyers are still working on settlements for another 80,000 vehicles with 3-liter diesel engines.
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 company has to buy back or repair 85 percent of the vehicles or pay even more money into an environmental trust fund.
“This historic agreement holds Volkswagen accountable for its betrayal of consumer trust and requires Volkswagen to repair the environmental damage it caused,” said Elizabeth Cabraser, the lead attorney for consumers who sued the company.
The scandal erupted in September when U.S. regulators revealed that the German automaker had fitted many of its cars with software to fool emissions tests. Investigators determined that the cars emitted more than 40 times the legal limit of nitrogen oxide, which can cause respiratory problems.
VW, which knew the EPA’s testing routine, got away with the scam for seven years before being caught by the International Council on Clean Transportation, which hired West Virginia University to test a car on real road conditions. The EPA has since changed its testing to include on-road tailpipe checks.
VW said in April that it has set aside $18.2 billion to cover the cost of the global scandal, which includes a total of 11 million vehicles worldwide.
(The Associated Press contributed to this report. Megan Doyle can be reached at 369-3321, mdoyle@cmonitor.com or on Twitter @megan_e_doyle.)