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UPDATE 1-Volkswagen offers to buy back diesel cars as German bans loom

* VW extends incentives for trade-ins to end-June

* Offers buybacks if cities impose diesel bans

* Buybacks apply to new diesel cars bought from April 1 (Adds details on brands, trade-in incentives)

FRANKFURT, March 29 (Reuters) - German carmaker Volkswagen said it would offer to buy back diesel vehicles if German cities ban them and also extended incentives for potential buyers of diesel cars to battle a slump in demand.

Cities in Germany can now ban the most polluting diesel vehicles from their streets after a court ruling in February. Many German cities exceed European Union limits on atmospheric nitrogen oxide, known to cause respiratory diseases.

At Volkswagen's core VW brand, the carmaker said its buyback offer applied to new diesel vehicles bought between April 1 and the end of 2018 and kicks in if the city in which the buyer lives or works bans diesels within three years of the purchase.

It said its dealerships would buy back diesel vehicles affected by bans at their current value if their owners at the same time bought a new vehicle that is not impacted by cities' driving restrictions.

At Czech brand Skoda, the guarantee applies to cars bought between April 1 and end-June but applies if bans are put in place within four years of the purchase date. At Audi, the offer is for leased vehicles.

At the same time, Volkswagen said it was extending to the end of June incentives for customers trading in older diesel models for new ones.

(Reporting by Maria Sheahan. Editing by Jane Merriman)