In a California court today, the United States government and Volkswagen announced a concrete plan to address the approximately 600,000 diesel-powered vehicles affected by VW Group's "emissions defeat device."

According to the preliminary "agreement in principle," Volkswagen will give owners the option to sell affected TDI vehicles back to VW, or to have the vehicle modified to meet emissions standards. Consumers who have leased an affected vehicle will be allowed to cancel their lease agreements.

The settlement also provides for payment of "substantial compensation" to affected owners in conjunction with the aforementioned buybacks and vehicle modifications, though a specific dollar amount per consumer was not announced in today's hearing.

Thirdly, the court stated that Volkswagen will establish a fund for "appropriate remediation efforts" to address the excess NOx emissions created by the affected vehicles. In addition, VW will be required to commit funding to promote "green automotive technology." No dollar amounts were mentioned here, either.

Owners are said to have two years to decide whether or not they want to sell their cars back to VW, or have them fixed. Those who elect a buyback will receive the resale value of their vehicle before news broke of the cheating last September, plus an additional cash compensation.

A deal reached between Volkswagen and the U.S. government over a global diesel emissions scandal that has rocked the automaker will include vehicle buyback offers and the possibility of repairs, says a federal judge.

Judge Charles Breyer said Thursday in San Francisco that the U.S. agreement will include "substantial" compensation for diesel vehicle owners, but he did not provide details on how much they will get.

…

Breyer said the proposed settlement includes a buy-back offer for 482,000 Volkswagen vehicles with 2.0-litre engines in the U.S..

He said it does not cover another 90,000 Volkswagen, Audi and Porsche cars and SUVs in the U.S. that have the 3.0-litre engines, but added that he expects resolution on that particular engine, plus the issue of possible fines levied by the Justice Department, to be dealt with "expeditiously," Reuters reported.

Kenneth Elias, a partner with Arizona-based automotive consultants Maryann Keller & Associates, said he thinks affected U.S. consumers will get cash compensation or an incentive on a new VW vehicle, or some kind of combination of the two.

Citing analysts and two unnamed sources, Reuters said VW may have to spend more than $10 billion US to cover the costs of the agreement with the U.S. government.

The U.S. government will seek a consent decree with the car company to formalize the agreement affecting only U.S. consumers. That decree must be filed by June 21, the judge said.

A consent decree is a legal settlement that would see VW agree to specific actions without admitting guilt or fault.

Additional details of the deal between Volkswagen and the U.S. government will stay secret until that consent decree proposal is filed, Breyer said.

Reuters reported the judge has imposed a gag order on all the parties involved until a final agreement is reached.

A spokesperson at VW's Canadian operations was not immediately available to comment. About 100,000 VW diesel engines were reportedly on the road at one time in Canada, and many of them may have included the emissions-cheating technology.

Tony Merchant, whose [Canadian] law firm is representing about 500 clients in lawsuits against VW, said he would advise against accepting the offer if it had been made in Canada.

"We think they are just trying to buy their way out of wrongdoing," Merchant told CBC News.

"[The proposed settlement] does not include Canadians, but it might be a sign of what they're prepared to offer Canadians," Merchant said.