Late this week, both Hyundai and Kia announced they reached a $200 million settlement with owners who suffered from rampant thefts exacerbated by a social media challenge last year showing how to steal certain models. The problem became so widespread, in fact, that insurance companies refused to cover impacted cars in some states and law enforcement agencies handed out steering wheel locks to drivers, free of charge.
This settlement covers around 9 million 2008-2022 Hyundai and 2011-2022 Kia owners who purchased cars with turn-key ignitions that were not fitted with an engine immobilizer. Most modern cars have such a device fitted from the factory, which aims to prevent theft by hotwiring by preventing someone from starting the engine without the correct key present. According to U.S. regulators, as reported by Reuters, the TikTok videos showing how easy Hyundai and Kia cars are to steal resulted in at least 14 crashes and eight fatalities.
In February, both Korean automakers said it would roll out software updates to 8.3 million vehicles to try and curb the widespread thefts.
How the automaker will compensate owners
If the settlement is approved by the court, up to $145 million of the final amount will reimburse out-of-pocket losses for owners who had their cars stolen, lawyers representing the owners said. Hyundai and Kia, for their part, said they will pay owners “who incurred theft-related vehicle losses or damage in addition to reimbursement for insurance deductibles, increased insurance premiums, and other theft-related losses.” Those “other expenses” include car rental, transportation costs not covered by insurance, towing costs and penalties or fines that owners incurred after their vehicles were stolen.
Those who experienced a total-loss scenario could be entitled to receive up to $6,125, as well as $3,375 for damage to personal property. For those who can’t be helped with a software update, Hyundai and Kia will provide up to $300 for the purchase of theft deterrent or prevention devices like steering wheel locks.
In addition to this lawsuit brought by owners, several cities also sued Hyundai and Kia over all the recent thefts. Those cities (again, per Reuters) include Baltimore, Cleveland and Columbus, Ohio; Milwaukee, San Diego, Seattle and St. Louis.
Here’s more information on the lawsuit from Hagens Berman, the firm representing the plaintiffs.