Hyundai Reaches Settlement for Overstated Fuel Economy Lawsuits

Hyundai Motor America and its affiliate Kia Motors America have reached a settlement with owners of more than 600,000 vehicles who have suffered financial damages as a result of overstated fuel economy estimates. The Korean automakers had been hit with a number of class action lawsuits over the last months stemming from inflated miles per gallon totals after announcing in November of last year that they had sold nearly 900,000 vehicles in the United States with incorrect ratings. A total of thirty eight cases were consolidated into a single case and brought before a federal court in Los Angeles, where the settlement was finally reached.

The terms of the settlement have not been made public at this time, though one lawsuit sought a total of $775 million for owners of affected vehicles. A spokesman for Hyundai declined to comment about the supposed total, citing the confidential manner of the settlement’s negotiations. Another spokesman from Kai Motors declined to comment as well, though a statement was issued in an email saying "Kia Motors America's priority is and will remain making things right for our customers, which is why we are offering to compensate all current and former owners of affected vehicles, using MPG ratings adjustments for the full length of their vehicle ownership.”

In their November announcement of the overstated mileage numbers, a flaw in their internal testing procedures was to blame. An apology was offered to those who were falsely swayed by the inflated numbers, and the fuel economy numbers for vehicles on sale were immediately reduced. Hyundai and Kia then promised to give debit cards to each owner as compensation to cover the extra gasoline needed for use. Based on average fuel costs in different states, owners were given credit for their number of miles driven using the inflated miles totals. Hyundai revealed last month that it had set aside more than $220 million for compensation, and Kia revealed a similar total of about $187 million.

In the public details of the proposed settlement, owners of vehicles with inaccurate miles per gallon estimates will have the option of receiving a single lump-sum payment, or payment through periodic installments to their credit cards through Hyundai and Kia’s reimbursement program. The amount of the payouts will depend upon the severity of the MPG overstatements; owners of the Elantra, Accent, Veloster, and Sonata Hybrid, all of which with highway miles per gallon ratings of more than 40, will receive an amount larger than models that claimed sub-40 estimates. For owners who purchased an affected vehicle used, the payout total will be halved.

For owners who chose the lump-sum option, they will also have the choice of a dealer service credit worth 150% of the total amount instead of a cash payout to be spent on things like repairs or aftermarket products from Hyundai themselves, or a new car rebate voucher valued at 200% the payout amount. Hyundai dealerships will be asked to notify owners of vehicles included in the settlement about their available options, as well as provide them with written information when they bring their vehicles in for tune-ups and other services.