The U.S. units of South Korean sister companies said they reached an agreement to pay a total of $395 million to settle lawsuits filed by owners of cars affected by the companies’ overstatements of fuel economy ratings.
In November 2012, the two companies conceded that they overstated fuel economy by at least a mile per gallon on vehicles after the U.S. Environmental Protection Agency found errors for 13 Hyundai and Kia models from the 2011 to 2013 model years.
The agreement would affect American owners of about 600,000 Hyundai and 300,000 Kia vehicles from the 2011 to 2013 model years. Hyundai estimates that the lump-sum payments will cost about $210 million, and for Kia the figure is $185 million.
The amount each company pays out will depend on how many owners opt for a one-time payment rather than participate in a “lifetime reimbursement” program in which owners get debit cards to pay them for the difference between actual fuel economy and what the company stated. Hyundai estimated that the average lump sum payment would on average be $320 minus any previous reimbursement payments received.
The proposed settlement will go to the plaintiffs of the 53 U.S. lawsuits filed, which were later consolidated. If the plaintiffs accept the settlement, it will then go up for approval by the U.S. District Court for the Central District of California.