Kia and Hyundai pay $200 million to settle car theft lawsuit
Kia and Hyundai have agreed to pay about $200 million to settle a class action lawsuit accusing the manufacturers of producing vehicles that are particularly vulnerable to theft, lawyers for the car owners and the manufacturers said Thursday.
The settlement, which affects the owners of about nine million vehicles, came as the country struggles with a rise in car thefts, fueled in part by videos on TikTok and YouTube showing how easily Kia and Hyundai vehicles can be stolen.
Lawyers representing affected vehicle owners said in a press release that the automakers have not equipped several 2011 through 2022 models with an immobilizer, a common anti-theft device that “prevents most vehicles from starting unless a code is sent from the vehicle’s smart key.”
That failure led to people posting videos online showing how to start engines using a regular USB charging cable or similar metal object, the lawyers said. Other design flaws, such as easy access to the ignition unit, also allowed the vehicles to be stolen in less than 90 seconds, they added.
Steve Berman, a lawyer representing the affected car owners in the lawsuit, said he and his team had been trying to reach a settlement that would cover many types of losses, “from those who were lucky enough that their theft-prone car had never been stolen.” to those whose stolen cars have been declared a total loss due to the negligence of Hyundai and Kia.
The settlement, which awaits federal judge approval, could be valued at about $200 million “depending on the number of customers who choose to participate,” the automakers said in a statement. They said the deal would reserve up to $145 million for cash losses faced by owners.
Hyundai and Kia said in a statement Thursday that they will also reimburse owners for deductibles, increased insurance premiums and other theft-related losses. The manufacturers operate independently, but Hyundai is the parent company of Kia Motors.
“We appreciate the opportunity to provide additional support to our owners who are impacted by increasing and ongoing criminal activity targeting our vehicles,” Jason Erb, Hyundai Motor North America chief legal officer, said in a statement. “Customer safety remains a top priority, and we are committed to continuing to install software upgrades and distribute steering locks to help prevent theft.”
John Yoon, Kia America’s chief legal officer, said in a statement that the settlement was “the latest step in a series of important actions, in addition to providing a free security software upgrade and distributing more than 65,000 steering locks.”
YouTube and TikTok said in March that the companies had removed several videos related to what is known as the “Kia Challenge” in recent months.
Vehicles eligible for a software upgrade that addresses the lack of an immobilizer include several Kia models, such as the Kia Sportage, Kia Sorento, and the Kia Sedona.
Lawyers for the vehicle owners said settlement websites would soon be available to the vehicle owners involved.
The Highway Loss Data Institute said in a 2021 report that Hyundai and Kia lagged other manufacturers in installing immobilizers. In 2015, 26 percent of Hyundai and Kia vehicle ranges had passive immobilizers as standard equipment, compared with 96 percent of other manufacturers, the institute found.
The law firm Hagens Berman, which represents the vehicle owners, said they would sometimes face repair costs of about $10,000.
“We believe that consumers who have purchased affected Hyundai and Kia cars deserve better,” the law firm said. “And the automakers responsible failed to adequately protect against basic theft to cut costs.”