Hyundai and Kia Fined Again for Nearly $300M For Overstated Gas Mileage

Lack of Corporate Integrity for Kia and Hyundai? The Impact to Personal Finances?

Deja vu for Kia and Hyundia: It was almost 2 years ago to the date, of the announcement that Hyundai and Kia overstated gas mileage ratings for over 900,000 autos sold since late 2010 and into 2012. Today, on election eve November 3, 2014, the U.S. Justice Department said they overstated the ratings for 1.2 million vehicles, so they fined them $100 million, and forfeited an estimated $200 million in greenhouse gas emission credits.

The Wall Street Journal reports that last year they agreed to settle a $400 million class-action suit over its mileage claims and paid owners an average of approximately $353 each. This has costs Hyundai and Kia more than $700 million.

You may recall their commercials advertising a lot of 40 mpg models a few years ago. The South Korean company’s explanation for the erroneous estimate was due to  “procedural errors” in their testing and not an intent to defraud.

Under the prior agreement, to help offset the increased cost of gasoline consumed by the affected automobiles, Hyundai/Kia paid people for their extra gas consumed, plus 15%. Although Kia and Hyundai owners who wrote me say this didn’t offset all of their gasoline costs for the time they owned, and planned to own their cars or SUVs. The website for the prior settlement, provided a place for them to see if they qualified and to get an estimated settlement amount at HyundaiMPGinfo.com. A full-page announcement in the Wall Street Journal 2 years ago, further indicated that you must go to a local dealer to verify your odometer reading, and arrange for a debit card to be sent to you.

I’m not sure if there is going to be any additional amounts for vehicle owners. I will update this article if a new arrangement is made.

Many informed car consumers do a lot of research before purchasing. Miles per gallon is a huge factor in their annual cost of auto-ownership. When corporations over-estimate gas mileage, they lead people to purchase cars they might not have. This directly affects people’s monthly budgets, where for some people every penny counts. Kia and Hyundai aren’t the only car manufacturers to be found guilty of this, Ford settled with owners mid-2014, for some vehicles for over $1,000 per unit.

Miles per gallon ratings have historically been inaccurate, that’s why in 2008 the EPA changed the way vehicles were tested to include things like acceleration, different weather conditions and air-conditioning use. The new system is not perfect, but it’s much closer to reality than the numbers manufacturers used to get away with publishing. Still the only way to get a real-world estimate is to read automobile publications like Car and Driver, Motor Trend, Autoweek and Automobile. I enjoy reading these periodicals because they do road tests in real-life conditions. In reality their tests push cars harder than the average person does, since they try to find the outside envelope of a vehicle’s performance. This worst case scenario is helpful, but some magazines have a test loop mpg to compare to their hard-driving mpg numbers to the government rating. Autoweek has a weekly TV show on PBS and carried by other networks too. I set my DVR, so that I can stay somewhat in tune with the goings on in the automotive world- I’m a car guy and I find this interesting.

If you are affected, please let me know. I would be curious what your reimbursement amount was the first time, for what they said was an average 3% less in gas mileage. Let me know too if you are contacted directly by Kia or Hyundai about this latest news.

At eFinPLAN we discuss constantly the need to make financial plans, and execute them well giving close consideration to major purchases, like for automobiles. If you are due money from the original settlement, or the class action case, look into getting money that might be owed to you. If you receive it, it won’t be a huge windfall, but you may want to set it aside in savings for future repairs or maintenance. It might come in handy when it’s time for new tires, or for more costly things like timing belt replacements.

7 thoughts on “Hyundai and Kia Fined Again for Nearly $300M For Overstated Gas Mileage

  1. john says:

    my reimbursement estimate is 69.26 i have a 2011 elantra limit with 17500 miles

    1. Kent says:

      Interesting, sounds like a 5 miles per gallon difference, say 35 gpm versus 40, at average price of gas of $3.50.

  2. Clark H. Siminski says:

    I am shocked at the letter I received concerning my mileage for my Hyundai Sonata Hybrid. I was just telling my wife “why are we getting 29 miles/gal when we were told 34 city 46 highway. I would like my money back for this purchase because I went shopping for mileage. My brother bought a Honda and he gets 34 mpg for a regular car?

    1. Kent says:

      Clark, what do you get on the highway- anywhere near that amount? First I would document gas purchases, miles driven, and type of driving for each tankful- get a little note book, keep gas station receipts- maybe for a month. Be careful to drive it conservatively. Then I would take it to the dealer asking for them to check your car out, since you are getting no where near the mileage advertised for the car. If your Hybrid Sonata checks out okay, and you are not satisfied with the explanation and the car, then I would contact the regional rep for Hyundai and tell him that you paid a premium for the Hybrid over the standard model, and you would like compensation, either in the form of refund of the additional amount you paid, or some other arrangement. Honestly, this sounds like the tip of the iceberg for Hyundai, and if you get no resolve, tell the regional rep that you are going to explore other things, such as contacting your state’s attorney general, lawyer etc. If I was a lawyer, I would be thinking class action- considering you paid something like I’m guessing $5,000 more for the Hybrid, and get barely better gas mileage than a regular car of like make and model. Let me know what happens.

  3. john says:

    what if you have already traded in a car that qualifies?

    1. Kent says:

      This is what I understand… You probably have to still be in possession of the car, to take it to them, so that they can verify mileage to calculate your rebate. You could contact the dealer to find out if your proof of sale with mileage is sufficient for a rebate.

  4. eFinPLAN says:

    This blog post has been updated to reflect today’s announcement of a $300 million fine.

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