Volkswagen agrees $1.2bn dealer compensation plan

Volkswagen has agreed to spend more than $1.2bn (€1.06bn) to compensate its 650 US dealers for their losses from the German car-maker’s diesel emissions scandal, sources have said.

The company and a lawyer for VW dealers announced a tentative settlement at a court hearing in San Francisco, but declined to disclose the amount.

The settlement, which followed talks that began in May, came as a judge ordered VW to move quickly to decide whether to fix or buy back 85,000 3.0 litre luxury vehicles with polluting engines.