Car Industry

Hyundai, Kia reach $760M settlement over engine fire lawsuit

Owners will receive cash settlements and plenty of other additional safeguards for over 4 million vehicles with the affected engines.

Total, there will be $760 million set aside to compensate owners.

Chris Paukert/Roadshow

Following years of scrutiny and even US investigations over vehicle engine fires, Hyundai and Kia have stumped up a substantial amount for vehicle owners, to the tune of three quarters of a billion dollars. The automakers, which are part of Hyundai Motor Group, said on Friday they've reached a settlement in a class-action lawsuit surrounding the troublesome powertrains.

The vehicles involved in the settlement from Hyundai include the 2011-2019 Hyundai Sonata, 2013-2018 Santa Fe Sport, 2019 Santa Fe, 2014-2015 and 2018-2019 Tucson. From Kia, the 2011-2019 Sportage, Sorento and Optima models are included. In total, 2.3 million Hyundai and 1.8 million Kia vehicles feature the 2.0- and 2.4-liter engines that have a fire risk.

The automakers previously recalled about 1.7 million of these vehicles to address the issue.

$760 million will be set aside for cash reimbursement to cover repairs and other related expenses. The cash settlements will also cover compensation for past trade-ins and sales that took place over repairs for owners and lessees. Aside from a monetary settlement, Hyundai outlined four other areas it will enact to do right by customers affected.

Every vehicle will be eligible for a free update to the knock sensor detection system, which will protect engines if the system detects trouble afoot. Damaged engines will be taken car of through free inspections, repairs and even replacement should the situation call for it. All models affected will additionally boast lifetime warranty coverage for the engine's short block if they undergo repairs. The warranty transfers with the car and does not end with the original owner.

Monetary compensation will also extend to various areas for owners such as loss of vehicle value, denied warranty coverage and more.

"This settlement acknowledges our sincere willingness to take care of customers impacted by issues with this engine's performance and recognizes the many actions we are already taking to assist our customers," Jerry Flannery, Hyundai Motor America's chief legal officer, said in a statement.

John Yoon, Kia of America's executive vice president and general counsel, added, "As the latest demonstration of Kia's commitment to vehicle quality and customer satisfaction, this resolution is the result of good-faith efforts among all parties to resolve owner concerns."

Following an expected court approval for the settlement this month, those involved in the class-action lawsuit will receive individual notices.

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