Toyota will have to pay a $1.6 billion settlement to compensate owners who have been affected by the unintended acceleration reports in 2009 and 2010.
The settlement is “extraordinary because every single dollar in the cash fund will go to claimants,” Judge Selna said in a statement.
Due to the unintended acceleration issue back in 2009 and 2010, owners of Toyota vehicles sold their cars at a loss through resale and trade-ins. A federal judge decided the Japanese automaker will pay from $125 to $10,000, depending on the level of depreciation for each owner, ending the economic battle between the automaker and its customers.
“This agreement allows us to resolve a legacy legal issue in a way that provides significant value to our customers and demonstrates that they can depend on Toyota to stand behind our vehicles,” said Celeste Migliore, National Business and Field Communications manager for Toyota Motor Sales, U.S.A., Inc.
Toyota will also have to install safety upgrades in almost 3.2 million vehicles and to create two funds of $250 million to compensate the customers who are not eligible for safety upgrades and also those who have sold their vehicles between September 1st, 2009, and December 31st, 2010, at a loss. Around $30 million will be paid by Toyota for automotive safety research on unintended acceleration and driver behavior and offer support for more than 16 million customers, eligible for free repairs for the next 10 years.