Kia and Hyundai, two major Korean automakers, have reached a settlement agreement worth approximately $200 million to resolve a class-action lawsuit. The lawsuit alleged that a significant number of vehicles produced by these manufacturers were highly susceptible to theft. The settlement encompasses around 9 million owners of Hyundai or Kia vehicles manufactured between 2011 and 2022, equipped with a traditional “insert-and-turn” steel key ignition system. This article will delve into the details of the settlement, the compensation provided to affected owners, the vulnerability of the vehicles, and the measures taken by the companies to address the issue.
Settlement Details and Compensation for Owners
Lawyers representing the owners have announced the settlement, which includes compensation for both out-of-pocket losses and damages incurred. The owners will receive up to $145 million to cover losses resulting from stolen vehicles. The compensation amount will vary depending on the extent of the loss. Owners may be reimbursed up to $6,125 for a total loss of their vehicles and up to $3,375 for damages to the vehicle and personal property, as well as insurance-related expenses.
Increase in Vehicle Thefts and Vulnerability
In recent months, there has been a notable increase in vehicle thefts involving the affected Kia and Hyundai models, primarily due to a hacking method that gained popularity on various social media platforms. A TikTok “challenge” demonstrating how to steal Kia and Hyundai vehicles lacking basic security features has contributed to the rising number of thefts. Regrettably, this trend has been associated with eight deaths, as reported by the National Highway Traffic Safety Administration.
Companies’ Response and Additional Measures
To address the vulnerability of their vehicles, Kia and Hyundai announced in February that they would introduce software upgrades to approximately 8.3 million vehicles in the United States. These vehicles lacked engine immobilizers, a security feature that prevents a car from starting without receiving an electronic signal from the key. However, the companies faced increasing pressure to take more substantial action to combat the thefts.
Legal Actions and Calls for Recall
Several cities, including Seattle, St. Louis, Columbus, and Baltimore, filed lawsuits against Kia and Hyundai due to the surge in thefts. Additionally, attorneys general from 17 states and the District of Columbia urged the National Highway Traffic Safety Administration (NHTSA) to issue a mandatory recall for the affected vehicles. These legal actions and calls for a recall further underscored the urgency for the companies to promptly address the issue.
The Settlement’s Impact and Future Measures
As part of the settlement agreement, Kia and Hyundai will automatically install anti-theft software in the affected vehicles during any dealership service appointment. This measure aims to enhance the security of the vehicles and prevent unauthorized access. The companies have expressed their commitment to supporting owners affected by the criminal activity targeting their vehicles.
The $200 million settlement between Kia, Hyundai, and the affected owners of vulnerable vehicles signifies a significant step towards resolving the class-action lawsuit. The compensation provided aims to cover out-of-pocket losses and damages suffered by the owners due to vehicle thefts. The surge in thefts, driven by a social media challenge, prompted legal actions and calls for a recall. In response, the companies announced software upgrades and pledged to implement additional security measures in the affected vehicles. Through these measures, Kia and Hyundai are striving to address the vulnerability issue, prevent future thefts, and ultimately ensure the safety and satisfaction of their customers.