VW To Pay U.S. Dealers $1.2 Billion in Compensation

Volkswagen AG says it has agreed to distribute $1.2 billion (€1.1 billion) to its 652 dealers in the U.S. to compensate them for the company’s diesel emission scandal.

The payments are to resolve “alleged past, current and future claims of losses in franchise value," according to the company. VW's U.S. dealers have been blocked by government regulatory agencies for the past 12 months from selling diesels that the company rigged to evade emission standards.

The deal must be approved by San Francisco federal court judge Charles Breyer. He also is scheduled on Oct. 18 to finalize a June settlement under which VW will spend $10.6 billion to buy back or fix 475,000 cheater diesels in the U.S.

Documents filed on Friday on behalf of affected owners indicate that two-thirds already have signed up for the plan, the Financial Times reports. The owners also will receive between $5,100 and $10,000 from VW regardless of whether they opt to keep or sell their cars. Fewer than 1% of the owners have opted out of the offer. Undecided VW customers have another 12 months to choose.