Volkswagen AG had its North America diesel emissions settlement increase another $1.6 billion in a deal made with vehicle owners in Canada.

The German automaker will pay up to C$2.1 billion ($1.6 billion) to buy back or fix 105,000 VW vehicles sold to owners in Canada, the company said yesterday. The settlement in Canada brings the buyback/fix-it vehicle total up to 580,000 in North America.

VW also agreed to pay a C$15 million ($11.2 million) as a civil administrative penalty tied into the Canadian settlement.

Most of the Canadian owners will receive between C$5,100 ($3,815) and C$5,950 ($4,451) in compensation from VW. That payment will be in addition to the value of the vehicle, or they can choose to have the vehicle repaired.

“Volkswagen’s primary goal has always been to ensure our Canadian customers are treated fairly, and we believe that this proposed resolution achieves this aim,” said Volkswagen Group Canada CEO Maria Stenstroem.

This settlement will be finalized in the first quarter of next year, as two Canadian courts hold approval hearings near the end of March. VW will need to pay legal fees to lawyers representing owners separately from the settlement fund.

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The tab has increased to more than $18 billion to settle claims against VW for diesel emissions rule violations in North America. That staggering cost will grow when a ruling comes in on another 80,000 3.0-liter vehicles in the U.S., which may be about $200 million plus the cost of buybacks and repairs; and the $18 billion doesn’t include settlements in Europe and Asia. There could also be additional U.S. fines from an ongoing criminal investigation, and federal and state environmental claims that will need to be wrapped up.

For the 80,000 3.0-liter vehicles sold in the U.S., a deal could be closing on Tuesday. Reuters had reported Friday that the $200 million or more could would be fined to offset the impact of the diesel pollution. The settlement is also expected to include buyback of about 20,000 of the 3.0-liter vehicles, and fixing the other 60,000 vehicles.

Automotive News