Kia and Hyundai to Pay $200 Million to Settle Suit Over Car Thefts

Feb 29, 2024

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The agreement in the class-action suit, which awaits a judge’s approval, would affect the owners of about nine million vehicles. It came as the nation contends with a surge in auto thefts.

By Eduardo Medina

Kia and Hyundai have agreed to pay about $200 million to settle a class-action lawsuit accusing the manufacturers of producing vehicles that have been especially vulnerable to theft, lawyers for the car owners and the manufacturers said on Thursday.

The settlement, which affects the owners of about nine million vehicles, came as the nation contends with a surge in auto thefts fueled in part by videos on TikTok and YouTube that demonstrate the ease in which Kia and Hyundai vehicles can be stolen.

Lawyers representing affected vehicle owners said in a news release that the automakers failed to equip several models from 2011 through 2022 with an immobilizer, a common anti-theft device that “prevents most vehicles from being started unless a code is transmitted from the vehicle’s smart key.”

That failure led to people making videos online showing how they could start engines by using a common USB charging cord or a similar metal object, according to the lawyers. Otherdesign flaws, such as easy access to the ignition assembly, also allowed the vehicles to be stolen in less than 90 seconds, they added.

Steve Berman, a lawyer representing affected vehicle owners in the lawsuit, said that he and his team had sought to reach a settlement that would cover many types of losses, “from those who were lucky enough to have never had their theft-prone car stolen, to those whose stolen cars were totaled completely due to Hyundai and Kia’s negligence.”

The settlement, which awaits the approval of a federal judge, could be valued at roughly $200 million, “depending on how many customers elect to participate,’’ the auto manufacturers said in a statement. They said the agreement would set aside up to $145 million for out-of-pocket losses that owners faced.

Hyundai and Kia said in a statement on Thursday that they would also reimburse owners for insurance 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 for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles,” Jason Erb, chief legal officer of Hyundai Motor North America, said in a statement. “Customer security remains a top priority, and we’re committed to continuing software upgrade installations and steering wheel lock distribution to help prevent thefts.”

John Yoon, the chief legal officer of Kia America, 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 over 65,000 steering wheel 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 that settlement websites would soon be available for affected vehicle owners.

The Highway Loss Data Institute said in a 2021 report that Hyundai and Kia had lagged behind other manufacturers in installing immobilizers. In 2015, 26 percent of Hyundai and Kia vehicle series 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 that they would sometimes be left with repair bills of roughly $10,000.

“We believe consumers who purchased affected Hyundai and Kia cars deserve better,” the law firm said. “And the automakers responsible failed to adequately protect against basic theft in order to cut costs.”

Eduardo Medina is a reporter covering breaking news. More about Eduardo Medina

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