In September 2015, VW admitted installing software that can sense when the car is being tested for emissions and temporarily reduce pollution to pass the test.
About 11 million vehicles are affected, including 482,000 in the United States.
VW has offered to buy back the vehicles for whatever they were worth before the scandal broke in September. Owners will also get $1,000 to $7,000 in cash (an average of $5,000) depending on the age of the car and other factors.
Owners will still receive compensation if they choose to have the vehicles repaired, assuming VW gets approval for repairs from regulators in the United States. There is no telling when that will happen.
VW will also pay for a program to offset the environmental pollution. On the road, the cars emitted up to 40-times the legal limit of nitrogen oxide (NOx), a byproduct of diesel engines that contributes to smog and causes respiratory problems.
The settlement only applies to 2.0 liter vehicles. It does not cover roughly 80,000 larger 3.0 liter Audi, Porsche and VW vehicles. It also does not cover civil penalties for violating the Clean Air Act, lawsuits from states and investors, or penalties from the Justice Department.