Most VW diesel owners want the buyback, not a fix for their cars

Under the terms of a proposed settlement, owners of Volkswagen 2.0-liter 4-cylinder diesel cars with illegal "defeat device" software have two options.

They can take a buyback from VW, or wait to have their cars modified to meet emissions standards, assuming said modifications are ultimately approved by regulators.

Almost half of the 475,000 affected TDI owners have already signed up for the settlement program—and most of them don't seem interesting in waiting for modifications.

The majority of the 210,000 owners who have signed up want buybacks, Elizabeth Cabraser—lead plaintiff's attorney in the settlement—said in an interview with Bloomberg.

A buyback may seem like the more sensible option, given that Volkswagen hasn't managed to get any modifications for the 2.0-liter TDI cars approved by the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB).

CARB said last month that it would begin testing modifications proposed by VW, but hasn't made any pronouncements since.

The overall settlement received preliminary approval from a U.S. judge at the end of July, but while owners can enroll for the process, formal buyback offers still won't come until at least October and perhaps longer.

Since news of the Volkswagen diesel scandal broke almost a year ago, owners have expressed concerns that modifications may adversely affect performance and fuel economy.

Many analysts, meanwhile, have questioned whether the majority of cars can be economically modified at all.

That's because about 325,000 of the 2.0-liter TDI cars lack selective catalytic reduction systems (SCR, also known as urea injection).

Those systems are now all but universally used to reduce emissions from most diesel cars built in the last few years. VW's had been a notable exception.

It's unclear whether the affected cars can meet emissions standards without SCR systems, and installing them would require the addition of considerable extra hardware.

Buybacks might also prove a quicker way for VW to address the majority of 2.0-liter TDI cars, as it does not rely on owners bringing their cars into dealers to be modified.

Buyback offers won't go out until the settlement receives its final approval, which can only happen at or after a hearing on October 18.

Owners will likely have to wait beyond that for any modifications.

Meanwhile, owners of TDI models equipped with 3.0-liter V-6 engines will remain in limbo until at least November.

That's when Volkswagen and regulators must report on progress regarding a settlement for those vehicles.