VW to cover maintenance costs for sludge-damaged engines under proposed settlement

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Volkswagen AG has agreed to pay maintenance costs under a proposed settlement in a class-action lawsuit over sludge-damaged engines in 479,768 VW and Audi models.

Judge Joseph Tauro of the U.S. District Court in Boston gave conditional approval of the settlement last week . A hearing to approve the final settlement is scheduled for March 11, 2011.

According to court documents, the settlement affects 1997-2004 Audi A4 models and 1998-2004 VW Passat models with 1.8-liter turbocharged engines.

The engines were prone to oil sludge from coking deposits even when maintained according to the automaker’s recommended maintenance intervals and oil-quality specifications, court documents show.

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