VW to set aside $8.8 billion for diesel buy-backs, fixes

FILE - In this Oct. 5, 2015, file photo, the VW sign of Germany's Volkswagen car company is displayed at the building of a company's retailer in Berlin. Attorneys for Volkswagen are due in federal court, and the judge overseeing hundreds of class-action lawsuits against the company is expecting an answer about how it plans to bring nearly 600,000 diesel cars into compliance with clean air laws. Senior U.S. District Judge Charles Breyer is scheduled to get an update from the company’s attorneys about its remediation efforts at a status conference on Thursday, March 24, 2016. (AP Photo/Markus Schreiber, File)

Volkswagen said today it had set aside $8.8 billion to buy back or fix diesel-powered cars that had been rigged to cheat in emissions tests.

The sum is part of a bigger sum the company deducted from last year's earnings to cover the costs of the emissions scandal, in which its cars were fitted with software that enabled them to pass tests but then turned emissions controls off during everyday driving.

The German automaker further broke down the set-aside for 2015 by saying it included $7.9 billion for fines and legal costs worldwide.

Analysts say the final bill will likely be much higher, when including the impact of lower sales. Volkswagen says it is reporting costs that it knows about at the present time.

Volkswagen is currently working out a settlement with U.S. authorities in federal court in San Francisco, and has said that would include an offer to buy back as many as 500,000 of the just under 600,000 defective vehicles.