Volkswagen set to send prepaid credit cards to diesel owners

WASHINGTON – Volkswagen of America will send prepaid credit cards to thousands of diesel vehicle owners in the coming weeks as a goodwill gesture to calm concerns over its diesel emissions scandal.

Owners of the affected 2009-15 Volkswagens with 2.0-liter diesels who receive the credit card can use it as they wish, but must “validate” the card at a VW dealer, according to two VW dealers briefed on the program. The dealers said they did not know how much the card would be worth.

Owners also will be offered a second prepaid card of equal value to the first that can be redeemed at VW service departments, one of the dealers said. Both dealers said they expected to learn official details about the offers from VW on Monday.

A VW spokeswoman was unavailable for immediate comment Saturday. The Truth About Cars, a website, first reported the prepaid card plan, followed by a report in The New York Times on Saturday. According to the Times, VW officials said the company would announce the program on Monday.

The program was described by dealers as a “goodwill” offer from VW to ameliorate owners of diesels with illegal “defeat device” software that the EPA said Sept. 18 was installed on some 482,000 2009-15 model year VW and Audi vehicles.

The software recognized when vehicles were undergoing U.S. emissions tests and calibrated the engine to produce emissions of nitrogen oxide at permissible levels. In normal driving, the cars NOx emissions are up to 40 times the level permitted by law.

As Automotive News reported last month, dealers first were told that VW was developing the goodwill program at the company’s Oct. 22 national dealer meeting in Orlando, but the general structure of the program wasn’t disclosed to dealers until this week.

The credit cards are VW’s first major step to repair its image with diesel owners, a small but loyal segment of buyers who paid a premium for VW’s “clean diesel” powertrain.

Owners are still waiting to learn how their cars will be repaired to regain compliance with U.S. clean air laws and what the effects of those repairs will be on fuel economy, performance and resale value. Many of those owners have sued the company for compensation for the emissions violations.

VW has said that each of the three generations of diesel engines containing the illegal software will require different repairs. About 325,000 of the vehicles using the first generation of VW’s 2.0-liter diesel will require software and hardware changes, VW of America CEO Michael Horn told a panel of U.S. lawmakers on Oct. 8. Those changes could be extensive.

About 67,000 newer vehicles with the third-generation diesel meet emissions standards and can be made compliance with a software update alone, Horn told lawmakers.

The roughly 90,000 2012-2014 Passats using the second-generation 2.0-liter diesel will need a software update, but it’s unclear if they will need hardware changes.