Hyundai-Kia Agree to $395 Million Settlement on False Fuel-Economy Claims

Hyundai Motor Co. and its Kia Motors affiliate have agreed to pay about $210 million and $185 million, respectively, to an estimated 900,000 customers to compensate for the companies' inflated U.S. fuel economy ratings.

A year ago the Environmental Protection Agency found the two companies guilty of manipulating fuel economy tests to increase their combined city-highway ratings by as much as 4 miles per gallon. The news spawned dozens of lawsuits and prompted EPA to reduce the fleet average fuel economy for the companies by 1 mpg.

The preliminary settlement covers about 600,000 of 2011-2013 vehicles sold in the U.S. by Hyundai and 300,000 vehicles sold by Kia.

Affected owners can choose to receive a single payment for as much as $353 (Hyundai) or an average $667 (Kia). Or they can remain in a 2012 Hyundai-Kia program that reimburses them annually for higher fuel costs plus 15% for as long as they own their vehicles.

Other alternatives include accepting 150% of their settlement as a credit at their dealer or receiving 200% of their lump-sum payment toward a new vehicle instead.