Hyundai Settlement Offers Lump Sum Paybacks to Owners of Overstated Fuel Economy Models
February 27, 2013 6:04 PM
comment(s) - last by
Drivers also have the option of accepting the debit card payments instead
After admitting that it
overstated fuel economy ratings
for some of its models last year, Hyundai has now agreed to settle its U.S. lawsuits.
A filing, which was revealed today, showed that Hyundai agreed to
general terms of a settlement
earlier this month. No financial terms have been disclosed, so it is unclear what Hyundai will have to pay under the settlement.
The proposed settlement gives owners of Hyundai models with misstated fuel economy ratings the choice to either continue accepting money through the debit card plan (which offers periodic payments to a credit card) or receive a lump sum settlement payout.
Payout amounts will depend on the difference in fuel economy from the actual figure to the overstated figure. Those with previously rated 40 MPG models -- like the Accent, Elantra, Veloster and Sonata Hybrid -- are expected to get a larger payout than those with under 40 MPG.
Hyundai said it had set aside about $225 million for its owner compensation plans.
Kia was also busted for overstating fuel economy ratings for some of its models, but the automaker was not a part of Hyundai's settlement. However, Kia was invited to join the settlement and is currently reviewing the terms.
Back in December 2011,
called on the EPA to investigate Hyundai over its fuel economy claims. Hyundai claimed that its Elantra achieved 29 MPG in the city and 40 MPG on highway. However, the organization received a higher-than-usual number of complaints that real-world mileage was in the mid-20 mpg range.
The EPA investigated Hyundai for misleading mileage claims and found that the fuel economy estimates of most of its 2012-2013 models were overstated. It made the same conclusion for Kia, and both automakers said they would lower the fuel economy estimates on the majority of their 2012 to 2013 models.
Hyundai and Kia admitted to overstating the estimated fuel economy on window stickers of about 900,000 vehicles sold in the U.S. since late 2010. Some of the MPG window stickers that will required include the Hyundai Accent and the Kia Soul ECO. The Accent had its 30/40/33 (city/highway/combined) rating drop to 28/37/31. The Kia Soul ECO saw the biggest drop of any affected model going from 27/35/30 to 24/29/26.
Kia said it has set aside about $187 million for its owner compensation plans.
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RE: Low payout for big profit
2/27/2013 10:35:09 PM
However, that's not any 2 mpg difference over 10,000 miles that equals $60 to $70 more per year. The 2 mpg difference costing $60-70 you mention is likely for the Accent: from 33 mpg to 31 mpg. Then, over 10,000 miles, the extra cost is $69.
If the 2 mpg difference was instead from 30 to 28 mpg over 10,000 miles, then the extra cost would be $84.
The difference for the Kia Soul, from 30 to 26 mpg over 10,000 miles is $180 which is considerably less trivial.
RE: Low payout for big profit
2/28/2013 9:30:04 PM
I wonder if the payments are the same for everybody. Maybe they offer higher refunds for those affected more. But on average, it looks like the math checks out. I'm pretty sure Hyundai must have some accountants that are good at math...
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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