The last few weeks has seen one of the biggest product liability recalls hit Volkswagen. VW owners recall will affect up to 11m vehicles. Approximately 16% of cars on the road in the UK are VW Group cars. The car manufacturer is preparing to refit defective emissions devices to comply with emissions standards. Consumers will be contacted over the next few weeks to book vehicles into local garages to have their vehicles refitted.
How did it happen?
VW is one of the biggest global car manufacturers in terms of sales. It has now admitted to providing false emission test results. Thus vehicles were missold on the basis of false results. The product was a lie. The software used was doctored to provide false readings.
As a result, the company has brought in Jones Day, a leading US law firm to carry out an internal investigation into the scandal and VW owners recall.
VW say that 1.2m UK diesel vehicles including VW, Audi, Seat and Skoda have been confirmed as affected models. These will be subject to VW Owners Recall.
Whilst to what level the emission rules have been broken is not clear, many owners are concerned about the how much they paid for the vehicle originally and what value they will get if they came to resell it. It is not clear what, if any, impact it will have on resale or second-hand market.
VW is preparing to release more details about how the VW owners recall will be organised.
VW owners recall has meant that VW has now set aside €6.5bn (£4.7bn) to cover costs.
There is no suggestion that the cars are in anyway unsafe to drive.
So what are the questions being asked?
What price will I get for my VW Owner Recall car?
This is not known at the present time what resale value will attach to VW Owners Recall cars. Customer faith in VW is strong and it is a trusted market leader for vehicles in the group. Resale price is linked to consumer confidence.
Jim Holder, editorial director at Haymarket Automotive which publishes WhatCar and AutoCar, told the BBC: “In the short-term there will be an impact on the value of these cars and their desirability. That is because we do not know where the other 10.5 million cars with these cheat devices are, which has led to an obvious concern there will be some in Europe.”
The Toyota issue has not impacted greatly on resale values and diesels have always had a good reputation for their durabilty and econonomy. What next for VW owner recall cars remains to be seen.
Vehicle Tax and VW Owner Recall
The Government has stated that it will introduce a new testing programme for diesel cars to check whether the emissions lie is more widespread than just VW vehicles. The concern is that VW is just the first to be found out.
Whether they will test for other types of emissions, rather than just the nitrogen oxide remains to be seen.
The emission levels directly affect the level of tax paid. They also affect company vehicles and the tax paid by employers and employees.
If the level of tax has been underpaid the the Government may seek to recoup that money from VW.
No doubt the Government will be carrying out more rigorous testing to ascertain whether the emissions test are being complied with by other car companies and whether they are due a windfall as a result of the fraud.
Are other vehicles affected by the VW Owner Recall?
The scandal has raised a number of questions about product liability, blatant fraud, lies to achieve better sales and the affect on prices. VW may not be alone in how and why they have chosen to cheat the emissions testing. Until the full investigation is complete it is difficult to ascertain why they chose to at all.
The technology exists to conform to the emissions tests and diesels are performing as they are expected to.
More robust testing of car emissions across Europe is likely to be brought in sooner to bolster confidence. Share prices have tumbled and VW will do all it can to re-establish its position in buyer confidence.
The British Vehicle Rental and Leasing Association said its members and customers were concerned about the implications for the fleet market. “We will be watching closely to see if the scope widens futher to include other manufacturers and vehicles”.
VW Owners Recall Compensation
It may be a little early to say if compensation is possible as the investigation into how and why it happened has not been concluded.
Whilst the emissions device is defective it will depend on what causative loss has been incurred by the owners. Whilst the Government may seek emissions tax back from VW for false readings, the impact on the individual is less certain.
If it can be shown that VW group vehicles are now devalued, a claim may be made. However, this is difficult to prove on the basis of emissions. It would be rather easier if it was for say, a safety issue which would put people off purchasing.
Many lawyers in the US are already considering bringing cases.
If the emissions difference is significant then there may be a claim for increased fuel costs. Individuals may be able to claim back the cost of repair if not dealt with directly by VW. If owners were charged more for a ‘clean’ diesel version – they may be able to claim the difference.
Following the VW Owners Recall there may be a protocol put in place to facilitate a compensation and refit scheme. We will keep you updated.
For more information on a potential claim email firstname.lastname@example.org