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Hyundai, Kia agree to lump sum payouts in MPG flap

7:45 AM, Dec 24, 2013   |    comments
The Kia Soul is one of the models included (Photo: KIA)
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Owners of more than 850,000 Hyundai and Kia vehicles that had their gas mileage revised downward will be eligible for lump-sum payouts under an agreement reached to end class-action litigation over the matter.

The payouts will vary by model. Hyundai owners of 2011 to 2013 model year cars that had their gas mileage reset will get an average of $353 if they opt for the lump-sum instead of the system currently in place. For Kia owners, which saw larger discrepancies in gas mileage figures on some models, the payouts will average $667.

"Our main objective was it to make it easy for the consumer to get back what they had lost, which is the added cost of fuel," says Rob Carey, a partner at the firm of Hagens Berman that launched the legal action.

The single payouts would be in lieu of the system set up by the twin South Korean brands, both part of industrial giant Hyundai, that requires owners to periodically return their cars to dealerships to have mileage verified, then be reimbursed based on it.

The case stems from litigation growing out of the discovery last year that Kia and Hyundai had made estimates of gas mileage that were too low, an embarrassment considering how fuel economy has become a leading factor in new vehicle purchases and are heavily touted by automakers. Under scrutiny of the Environmental Protection Agency, Hyundai and Kia made the changes in unsold cars' window stickers and set up a system to reimburse buyers for their added fuel costs.

The gas mileage revisions affected at least 549,000 Hyundais and about 300,000 Kias, including popular models like Hyundai's Elantra sedan and the Kia Soul crossover. Under the settlement, the owner of a 2012 Elantra would receive a lump sum payment of $320 minus any previous reimbursement payments, Hyundai says.

But Carey cautions owners to consider their own circumstances in deciding whether the lump sum is better for them than bringing their cars to dealers to have the mileage recorded. Those who log heavy miles in the cars where gas costs a lot will benefit less from the settlement, he says.

The settlement includes the option of getting 150% of the payout in credit at a dealership so that it can be applied to maintenance and repair costs. Or the payout amount will be good for 200% of the cash amount when it comes to credit on purchase of a new vehicle.

Second owners of cars are able to get claim half of the settlement value, Carey says.

He says that in probing the case, lawyers pored over thousands of documents in South Korea. "We didn't find anything where it was clearly fraud or deceptive," Carey says. In some cases, he says those involved were questioning how to interpret a regulation, and that they found the fuel-economy rules themselves were not clearly defined.

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