Owners of nearly 1.2 million cars in the UK have been told their diesel vehicles will be modified because they contain software German car-maker Volkswagen (VW) used to cheat emissions tests.

This makes affected cars appear 'greener' than they actually are – and VW has admitted 11 million diesel vehicles worldwide have been fitted with it.

It's not just VWs affected, as the company also makes Audi, Skoda and Seat cars, although the issue only affects diesel vehicles, not those with petrol engines.

VW has suspended the sale of 4,000 vehicles in the UK, which contain engines that may be fitted with this software.

It's too early to determine if drivers can definitely claim compensation, as it's not clear what costs they will incur. However, the UK Government confirmed it won't raise road tax if cars are proven to be less green than they really are. Here's what we know so far about the scandal.

Which UK cars are affected?

VW says the issue relates to diesel vehicles with a particular type of engine, called 'EA 189'. This engine has been in use since 2009 and is included in models such as the Golf, Jetta, Passat, Tiguan, Scirocco and Polo.

However, VW hasn't confirmed if all diesel vehicles with this particular type of engine are affected, and just because you have one of the models above, doesn't mean you're affected either. VW says the number of vehicles affected in the UK is as follows:

  • 508,276 Volkswagen cars
  • 393,450 Audis
  • 131,569 Skodas
  • 76,773 Seats
  • 79,838 VW commercial vehicles, such as vans

The RAC Foundation has compared the figures released by VW with information from the DVLA and says this reveals 37% of all VW diesel cars on UK roads are affected. It adds that this is 45% of Audi diesel cars, 25% of Skoda diesel cars and 37% of Seat diesel cars (it doesn't have figures for commercial vehicles).

Update: 8 October 2015: You can now check if your vehicle is affected on the respective VW, Audi, Skoda and Seat websites. To do this, you need to type in your Vehicle Identification Number (VIN), which VW says you can find in your service book or at the bottom of the windscreen on the left hand side as you look into the vehicle from the outside.

How could I lose out financially?

While not a certainty by any means, experts have suggested there are two key areas where customers may lose out financially as a result of the scandal:

  • Repairs may make cars less fuel efficient. This means you could pay more for diesel as you'll have to fill up more often, assuming your driving habits don't change.
  • The value of affected cars could be lower. The whole saga, bad publicity and potentially higher running costs could push values down.

Not everyone is convinced there will be this level of consumer detriment though. Dylan Setterfield, senior forecasting editor at CAP Automotive, which supplies used-car prices, doesn't believe there will be a significant impact on values. He says: "Until the full impact of the issue is fully understood, it is very difficult to plan around the problem.

"But we do not expect there to be any significant impact on used-car values in the UK as a direct result of the US emissions scandal. The last global recall was the Toyota/Lexus issue, and despite the fact that this had serious safety implications, there was no discernible impact on used-car values."

The UK Government has also confirmed motorists won't be forced to pay more in road tax if their vehicles are found to be fitted with the illegal software (see Government VW assurances).

Concerns had been raised that road tax – officially known as Vehicle Excise Duty (VED) – might increase for those whose cars were fitted with this "defeat device" software that made cars seem greener than they are, as owners of cars that higher emit CO2 emissions pay more tax.

Can I claim compensation?

There is nothing firm just yet because it is not clear if car-running costs will actually rise, and it is too early to tell if values will fall.

UK law firm Leigh Day says it's investigating potential legal claims on behalf of hundreds of vehicle owners and companies, and has already written to the motoring giant demanding it pay motorists compensation for any related losses.

Several firms have already issued class-action lawsuits in the US, but VW hasn't fully addressed our questions on whether it will offer compensation to customers. It just says it's working as quickly as possible to resolve the issue.

VW says affected customers will be contacted, with details of how their vehicles will be fixed "in the near future".

The company has however confirmed that customers will not have to pay for this procedure. VW adds that all affected vehicles are technically safe and roadworthy, so you can continue driving them.

Is the UK Government doing anything?

Transport Secretary Patrick McLoughlin says the Vehicle Certification Agency, the UK regulator, is working with vehicle manufacturers to ensure this issue is not industry-wide.

As part of this work it will re-run laboratory tests where necessary and compare the results with cars' emissions in real-world situations.

McLoughlin adds: "Our priority is to protect the public and give them full confidence in diesel tests.

"The Government expects VW to support owners of these vehicles already purchased in the UK and we are playing our part by ensuring no-one will end up with higher tax costs as a result of this scandal.

"We are also starting our testing programme to get to the bottom of what the situation is for VW cars in the UK and understand the wider implications for other car types to give all consumers certainty.

"I have been pressing for action at an EU-level to improve emissions tests and will continue to do so. I have also called for a Europe-wide investigation into the use of 'defeat devices', in parallel to the work we are doing in the UK."

What does VW say?

On 25 September, Dr. Herbert Diess, CEO of the Volkswagen passenger cars brand, said: "We are working at full speed on a technical solution that we will present to partners, to our customers and to the public as swiftly as possible.

"Our aim is to inform our customers as quickly as possible, so that their vehicles comply fully with regulations. I assure you that Volkswagen will do everything humanly possible to win back the trust of our customers, the dealerships and the public."

Additional reporting by the Press Association.