In the Face of Lawsuits, Hyundai Agrees to Lump Sum Payments

In the Face of Lawsuits, Hyundai Agrees to Lump Sum Payments

In the face of lawsuits, Hyundai agrees to lump sum payments for customers affected by inaccurate fuel efficiency ratings. Over 800,000 Hyundai and Kia vehicles are eligible for the payout after Hyundai and Kia dealerships altered the ratings on car window stickers. This step was taken to compensate for very low initial fuel efficiency estimates. In the end there technically was no illegal actions, but the bottom line is that customers ended up paying more for fuel than was advertised. At best the estimates were off by one mile per gallon, but at worst only two. There is currently a reimbursement plan available wherein depending on their vehicle customers can go to a Hyundai or Kia dealership when a certain number of miles have been driven and be given a payment to cover the extra fuel costs. Customers can also apply the monetary sum of the payments toward maintenance or credit to buy a new vehicle. Customers that do not opt in for the lump sum can continue to do this over the entire life of the vehicle.

Of the 850,000 vehicles affected, roughly 549,000 are Hyundais and 300,000 are Kias. The majority of  the vehicles affected are the popular Hyundai Elantra sedan and the Kia Soul crossover, both known for being fuel sippers that still offer an entertaining drive. Because the efficiency estimates are different for each vehicle, the lump sum payments will vary accordingly. Hyundai expects to pay about $210 million in the U.S., or about $320 per customer, and Kia expects to payout $185 million. In the face of lawsuits, Hyundai agrees to lump sum payments to any affected customer that requests it, but considering the option of life long fuel savings and discounted dealerships maintenance, many could benefit from declining receiving all they are owed all in one go. This is especially true if the difference between the actual fuel efficiency and the efficiency stated is especially great.

Hyundai has stated that in the end they wanted to ensure that it would be easy for people to settle the issue in the way they wanted, whether it was a lump sum or an on going reimbursement. At the moment there has been no major backlash past the initial lawsuits and their share of the American motor market has only dropped 0.3 percent. In the face of lawsuits, Hyundai agrees that lump sum payments are a reasonable option and urges any customer that does not wish to stick to a repayment plan to cash out or apply the payout towards a new vehicle. Customers that choose to apply their cash towards a new Hyundai or Kia will enjoy a 200 percent exchange rate, a deal uncommonly good for auto dealers, and unlikely to be seen if the automaker isn’t feeling sheepish over something. The current plans are for U.S. owners only, but it is expected that Canadians that are feeling shortchanged by the revelation of over-estimated fuel efficiency will be able to decided between reimbursement or a lump sum in early 2014.

By Daniel O’Brien

Sources:
USAToday
Bloomberg
Reuters
The Economic Times

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