VW Dealers Move to Finalize Proposed $1.2 Billion Settlement with Volkswagen

652 franchise dealers file completed settlement agreement and motion for preliminary approval

SAN FRANCISCO – Today, Volkswagen franchise dealer Jack Bertolet filed a motion for preliminary approval of a settlement for all Volkswagen-branded Franchise Dealers in the United States, according to Hagens Berman. If the Court grants preliminary approval, details of the settlement will be mailed to VW Franchise Dealers for their consideration prior to a final approval hearing.

Plaintiffs’ lead counsel Steve Berman remarked: “The Volkswagen-branded franchise dealer class action settlement filed today represents an outstanding result for Volkswagen’s 652 franchise dealers as of September 18, 2015.”

Franchise dealers will share $1.208 billion in payments intended as compensation for the alleged diminution in the value of their franchises. The funds will be allocated based upon the formula that Volkswagen used to provide its monthly support payments to franchise dealers, specifically, the payment made in November, 2015.

Each Volkswagen-branded franchise dealer who does not opt out of the settlement will receive a cash payment of approximately 71 times the payment such dealer received in November 2015. The average settlement payout is $1,852,760.74.

Hagens Berman has established a dedicated email, toll-free number and website to answer franchise dealers’ questions about the proposed settlement. Dealers are invited to contact Hagens Berman’s legal team:


Half of the settlement payment will be made up front, and the remaining 50 percent will be paid in 18 equal, consecutive monthly installments beginning the month following the initial payment.  Dealers who sign a release can have their payments start within 30 days of the end of the opt-out period for the settlement, which should occur before the end of this year.

In addition to the cash payments intended to compensate dealers for alleged diminution in dealer goodwill and capital investment, Volkswagen has agreed:

  1. to continue its current “VIP and “CSI” dealer incentive programs at their current level for one year following the end of the opt out period;
  2. to defer any capital improvements that are contractually required of dealers for two years from the end of the opt out period; and
  3. to not require any capital improvements in dealership purchase and sale agreements that are submitted for approval within one year of the end of the opt out period.

In addition, Volkswagen has agreed to remedy the issue of what to do with their diesel cars that have been stuck on Franchise Dealers’ lots since the emission scandal when Volkswagen issued broad stop-sale orders covering diesel powered cars. Volkswagen has agreed to resolve dealer inventory of TDI vehicles by:

  1. for used TDI vehicles for which there is no approved emissions modification (“AEM”), repurchasing such vehicles from dealers under the terms of the applicable consumer settlement;
  2. for new TDI vehicles for which there is no AEM, repurchasing such vehicles from dealers at the dealers’ net wholesale costs; and
  3. for new vehicles for which there is an AEM, offering special consumer lease and dealer service loan programs.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in 10 cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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