Paul Willis, Volkswagen’s UK managing director, has confirmed to the Government’s Transport Select Committee that owners in the UK will not receive any compensation for vehicles effected by the emissions scandal. This is controversial because US owners will receive a $1,000 gift card as a goodwill gesture from the brand.
VW argues that any compensation would be better spent speeding up the process of fixing the 1.2 million affected cars in the UK, rather than reimbursing the owners. UK emissions regulations are looser than the US’s so will be easier to meet meaning the amount of time needed to recall affected cars is lower than US. Rectification requires less time for UK owners so the total cost is more manageable than in the US as a whole.
VW also stated compensation is unnecessary in the UK because the higher nitrogen oxide levels wouldn’t affect the amount of road tax owners pay in the first place – UK emissions regulations depend on CO2 levels rather than an overall picture.
Crucially, Volkswagen doesn’t expect any significant impact on the resale values as a result of this scandal – informing its decision not to provide owners with compensation. VW has also stated that fuel economy and performance wouldn’t be noticeably affected following the technical fixes in the recall.
The company will inform owners of the affected vehicles over the course of 2016, starting from March. The affected cars will receive a software update from a dealership taking approximately half an hour.
While compensation seems an unlikely prospect, VW will offer a loyalty discount on the Volkswagen range to all existing customers. This comes in the form of deposit contributions towards new vehicle finance agreements.