Volkswagen’s Dieselgate bill set to rise an extra $1.2 billion

American owners of Volkswagen-group vehicles with 3.0-litre v6 TDI engines affected by the diesel’s emissions scandal will now be eligible for compensation.

The world’s biggest car manufacturer has reached a settlement in California federal court, in which it has agreed to pay out $US1.2 billion ($A1.6 billion) to the owners of 78,000 VW, Porsche and Audi vehicles.

This comes after a similar, $US14.7 billion settlement involving 475,000 2.0-liter four-cylinder turbo-diesel cars was settled in October.

Under that settlement VW had to give out cash payments and offer to buy back all affected vehicles, terminate leases or make necessary repairs for them to comply with US emissions standards.

However with this latest settlement the German carmaker will only be obliged to buy cars back if it can’t make the necessary fix to comply with regulations. Owners whose cars can be fixed will get compensation of between $US7000 and $US16,000 on top of the repair work.

The settlement for 3.0-litre TDIs is divided into Generation 1 and Generation 2 vehicles. Generation 1 includes 2009–2012 Volkswagen Touaregs and Audi Q7s, while Generation 2 includes 2013–2016 Touaregs; 2013–2015 Q7s; 2014–2016 Audi A6, A7, A8, A8L and Q5s; and 2013–2016 Porsche Cayenne diesels.

The Generation 2 vehicles will have the option to be repaired so they’re fully compliant with regulations without having to be bought back.

Not having to buy back all affected vehicles will save Volkswagen around US$2.8 billion (A$3.7 billion).

A court hearing is set for February 14, which is expected to approve the deal which will allow the company to begin compensation and repairs in May.

This latest settlement could see the Volkswagen’s total worldwide Dieselgate bill top $US25 billion ($A33 billion).

So far Australian owners of more than 70,000 affected cars are yet to see a cent in compensation with the company given the go-ahead to just fix the cars via a recall.

However, Volkswagen Australia is facing court action from the Australian Competition and Consumer Commission over claims it misrepresented vehicle emissions in advertising, as well as separate class action claims filed on behalf of disgruntled owners. Volkswagen Australia has denied all the claims against it.

While this could result in the company facing millions of dollars in fines here, the company is disputing the claims saying a software fix is immediately available for more than 35,000 vehicles and pending for the rest.

It also insists the cars engines didn’t breach Australian emission regulations.

Meanwhile, VW supplier Bosch has also agreed to a separate $US325.7 million compensation package for affected owners of both 3.0-litre and 2.0-litre TDI vehicles.

The company supplied the devices that tricked emissions tests and will pay between $US350 and $US1500 to owners of all affected vehicles.