New Hyundai, Kia Engine Failure Settlement Covers 2.1M Additional Vehicles [UPDATE]

Nearly two years after final approval was issued for a $3.1 billion settlement over an alleged engine defect in certain Hyundai and Kia vehicles, the automakers have reached another class action settlement covering an additional 2.1 million vehicles.

While the previous settlement covered vehicles equipped with Theta II gasoline direct injection (GDI) engines, the more recent deal aims to resolve several cases that claimed the automakers’ Theta II 2.4-liter multipoint fuel injection (MPI), 1.6-liter Gamma GDI and 2.0-liter Nu GDI engines are plagued by the same defect, which can allegedly cause engine seizures, failures and even fires.   

Certain Hyundai Santa Fe, Sonata Hybrid, Tucson, Elantra and Veloster vehicles and Kia Forte, Optima Hybrid, Sorento, Soul and Sportage vehicles with these engines will be covered.

The sprawling 143-page settlement, which received preliminary approval on February 8, will provide nine categories of relief for consumers, including an extended warranty, reimbursement for repairs and out-of-pocket expenses, goodwill payments, a rebate and even compensation for vehicles that were destroyed by fire or sold or traded in because of an engine failure.

Keep reading to find out who’s covered by the settlement, the benefits it will provide and what you’ll need to do to file a claim when the time comes.

Who is covered by the Hyundai, Kia engine defect settlement?

The settlement aims to cover anyone who purchased or leased one of the affected vehicles (listed below) in the United States, including those purchased while the owner was abroad on active U.S. military duty.

If you’re unsure whether your vehicle is covered, you’ll be able to enter its vehicle identification number (VIN) on the official settlement website (which is not yet live) to find out.

What benefits does the settlement provide?

According to the 27-page approval order, the settlement will provide “largely everything Plaintiffs sought in their complaints.”

Perhaps most notably, everyone covered by the settlement will be eligible to receive a 15-year or 150,000-mile extended warranty covering “all costs associated with inspections and repairs” of damage caused by connecting rod bearing failure. Those who have not already done so will also be eligible to schedule a free inspection under the warranty within 90 days of the settlement’s final approval to determine whether their vehicle has any symptoms of connecting rod bearing failure.

Along with free repairs under the extended warranty, authorized Hyundai and Kia dealerships will also provide free loaner vehicles if requested or reimbursement of transportation expenses of up to $80 per day until the repair is completed.

Importantly, in order to be eligible for repairs under the extended warranty, you must complete a knock sensor detection system software update – which is being performed free of charge by Hyundai and Kia and is designed to alert a driver if certain engine conditions are detected that could signal an impending failure. This software update must be performed within 150 days of the date notice is sent out to those covered by the settlement.

What if I already had my car repaired?

The settlement is also offering full reimbursements of repair expenses for covered vehicles that already had repairs performed for damage caused by the alleged defect.

In order to be reimbursed, you will need to submit a claim form with supporting documentation, such as proof of ownership, proof of the repair, proof of payment and, if applicable, insurance paperwork.

Reimbursements will be provided for repairs performed at an authorized Hyundai or Kia dealership or a third-party repair shop and will exclude any amounts you’ve already been reimbursed (such as through insurance or a goodwill payment from Hyundai or Kia).

Additionally, anyone who attempted to have their car repaired under warranty at an authorized dealership and was denied before receiving notice of the settlement and then had their car repaired elsewhere will be eligible to claim a $150 goodwill payment.

The settlement will also provide reimbursement of towing expenses incurred while getting your car repaired and, if a loaner vehicle was not provided, up to $80 per day for rental car, ride-sharing or other transportation expenses.

Consumers who were inconvenienced by prolonged delays, i.e., more than 60 days, in getting their vehicle repaired at an authorized dealership will also be entitled to a goodwill payment based on how long they had to wait to get their car back. If repairs took 61 to 180 days, the claimant will receive $75; those whose repairs took 181 to 210 days will receive $100; and another $100 will be added for each additional 30-day period. Claimants will be able to choose whether they want to receive this payment as a cash debit card or a dealer service card worth 150 percent of the amount due.

What about other expenses I incurred due to engine failure?

Regardless of whether your car was repaired, anyone who incurred unreimbursed towing or transportation expenses due to their engine failing or catching fire will be eligible to claim reimbursement of those expenses.

More specifically, if the incident occurred within 150 miles of your home, you’ll be able to file a claim for up to $125 for transportation expenses you incurred on that day.

If the incident occurred more than 150 miles from home, you’ll be able to file a claim for reimbursement of the actual costs of transportation, lodging and reasonable meal expenses for up to three days, for a maximum of $300 for the first day, $200 for the second day and $100 for the third day.

What if I no longer have my car?

If you sold or traded in your vehicle after experiencing an engine failure or fire within the extended warranty period before receiving notice of the settlement and never had the car repaired, you’ll be entitled to claim $150 and the difference between the car’s baseline Black Book value (i.e., the wholesale used vehicle value) and the amount you received in an arm’s-length negotiation from the sale or trade-in.

If you lost your vehicle as a result of an engine fire caused by the alleged defect, you’ll be entitled to a payment of the car’s maximum Black Book value at the time of the loss minus any value you already received (such as an insurance payment), plus an additional $150 goodwill payment.

What if I replace my car after finding out about this settlement?

If you “lose faith” in your vehicle after receiving notice of the settlement, experienced an engine failure or fire, decide to sell your vehicle in an arm’s-length negotiation and then purchase a replacement Hyundai or Kia from an authorized dealership, you may submit a claim for a rebate.

The amount you’ll receive for the rebate will be the difference between the car’s maximum Black Book value and how much you received for the sale or trade-in, up to the following amounts:

What if I was injured or my property was damaged?

Notably, the settlement excludes claims for death, personal injury and property damage (other than to a vehicle covered by the settlement).

This means that if you or a loved one was injured, died, or experienced property damage as a result of the alleged engine problem, you still have the right to sue the automakers over those claims.

If you’re interested in taking legal action, you may want to reach out to an attorney in your area to find out more about your options.

How do I file a claim?

Claims for reimbursement of repairs or expenses, goodwill payments, lost value, and rebates can be made online or by mail or email once the official settlement websites are live.

Hyundai and Kia will add a link to their respective settlement website on owners.HyundaiUSA.com and owners.Kia.com once the websites are up, and we’ll also update this page with the URLs.

So, what can I do now?

The settlement documents note that Hyundai and Kia have already initiated several recalls and product improvement campaigns, including the knock sensor detection system software update, related to the problems at issue in the litigation. You can check whether your car is covered by a recall or campaign by entering the VIN here for Hyundais and here for Kias.

Other than that, keep an eye on your mailbox and inbox for a class action notice that will provide more information about the settlement and direct you to the settlement website. Those covered by the settlement will be contacted using customer mailing and email addresses in the automakers’ records and from a third party authorized to collect drivers’ contact information from state agencies, and the defendants have been ordered to mail out the notices by June 7, 2023 at the latest.

In the meantime, those who want to stay up to date with class action lawsuit and settlement news can sign up for ClassAction.org’s free weekly newsletter.

How did we get here?

Starting in 2017, class action lawsuits began to be filed alleging that certain Hyundai and Kia vehicles were equipped with defective engines prone to premature failure and even catching fire. Those cases were eventually settled in May 2021 as part of a $1.3 billion deal covering vehicles equipped with the Theta II GDI engine.

According to court documents, while litigating that case, the plaintiffs’ counsel received reports of engine failures and fires in vehicles with several other engine types, which led to the filing of the lawsuits covered by this settlement.

In September 2022, the parties asked the court to approve their proposed settlement, and the deal received preliminary approval on February 8, 2023, paving the way for notice to be sent out to those covered.

The next step is for the settlement to be granted final approval, a hearing for which has been scheduled for September 8, 2023. If all goes well (and after any appeals are resolved), those who filed valid claims can then expect to receive their payments.

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