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Can Money Solve Volkswagen’s Problems?

The continuing drumbeat of bad news about Volkswagen’s software that deceives emissions-testing equipment has hurt the company’s global reputation so badly that promises to recall and refit the vehicles with honest software may not have assuaged its customers.

So now will money make things better? Volkswagen evidently thinks so.

The company announced Nov. 9 that it will issue prepaid cash cards to current owners of its diesel vehicles caught up in the scandal, whether the motorists bought the cars new or used, Volkswagen spokeswoman Jeannine Ginivan said.

The program, first reported by the website The Truth About Cars (TTAC), will involve two cash cards, one worth $500 that can be used anywhere, and the second worth from $500 to $750 that can be used only at a VW dealership. Owners of the vehicles will receive both cards.

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Volkswagen is calling the offer its “TDI Goodwill Program.” (TDI stands for “turbocharged direct injection,” the diesel engine technology developed by VW). To determine whether you may qualify for the program, you can go to www.vwdieselinfo.com once the program is formally announced and look up your car’s vehicle identification number.

There you can register to get updates regarding future developments on their diesel vehicles. Finally you simply need to provide a VW dealer with proof of ownership, and the cash cards are yours.

For now, the program is expected to apply only to four-cylinder diesels, though it could be expanded to 3.0-liter V-6 diesels later, TTAC reports. They include TDI-equipped Beetles, Golfs, Jettas and Passats sold since the 2009 model year, and Audi A3s.

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Volkswagen already faces potential lawsuits from owners who have seen the resale value of their vehicles drop because the cars emit far more toxic nitrogen oxide than is detected by testing. It’s not clear yet whether accepting the cash cards would mean they would have to abandon plans to sue the company.

The illegal software, called a “defeat device,” was designed to identify when a car was being tested and to turn on the vehicle’s emission controls at that time. Once the test was done, though, the software disabled the controls and, on the road, the cars discharged as much as 40 times more nitrogen oxide than is permitted under the environmental laws of most countries.

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The cash card is seen as an attractive offer for motorists who want to get rid of TDI-equipped Volkswagens but otherwise would like to keep owning a car made by VW. Already the company said it would financially help dealers buy back diesel-powered cars for trade-ins at their value before the scandal erupted, and has also offered a $2,000 discount for those buying another VW.

This is serious business for VW, but the website Art of Gears has found a lighter side of VW’s effort to buy its way out of the scandal with the cash cards.

“For $500,” the website says, “you can buy about 170 gallons of gas (at today’s current prices), 1,000 Jack in the Box tacos (or McDonald’s Apple Pies), 10 hours of deep tissue massage or two and a half sky dive jumps. The possibilities are endless.”

By Andy Tully of Oilprice.com

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