Hyundai & Kia “MPG Gate” Could Pay Out Millions to Car Owners

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If you purchased a Hyundai or Kia in the past three years, you may be involved in what is being dubbed “MPG Gate” – and may have a payment coming your way.

The Environmental Protection Agency (EPA) announced Friday that the carmakers overstated the gas mileage on 900,000 vehicles, or 35% of its 2011-2013 model-year vehicles. The discovery could result in sanctions from the U.S. government and millions of dollars in payments to car owners.

If you remember, Hyundai was hit with a class action lawsuit this summer alleging its popular Hyundai Elantra only gets 29 mpg on the highway – far below its advertised “40 Miles Per Gallon” sales pitch that lured thousands of consumers.>

Hyundai defended the Elantra 40 mpg estimate by saying it was certified by the EPA, but now the agency is saying its found widespread discrepancies after auditing gas mileage tests performed at Hyundai and Kia’s joint testing operations in Korea.

Both automakers have made public apologies, calling the discrepancies “procedural errors,” and are in the process of establishing reimbursement programs that will refund consumers for the differences in fuel costs between the original and recalculated ratings.

The EPA found that about one-third of the 2011 through 2013 model year cars sold by the companies had overstated window sticker mileages.

“Consumers rely on the window sticker to help make informed choices about the cars they buy,” said Gina McCarthy, assistant administrator of the EPA’s air-quality office. “EPA’s investigation will help protect consumers and ensure a level playing field among automakers.”

The automakers will now have to take off between one and six miles per gallon from the vehicle stickers of most of their models. The Elantra will lose two, while the Hyundai Santa Fe will go from 33 mpg to 29. The 2013 Kia Soul will lose six from its highway figure, lowering it from 34 mpg to 28 mpg.

The EPA has not said if the companies will be fined or if a criminal investigation is launched. Hyundai and Kia are owned by the same Korean company and share factories and research.

Both companies will establish a program to reimburse customers for the difference between the mileage on the window stickers and the numbers from the EPA tests. Dealers will find out how many miles the cars have been driven and figure out how much extra owners paid due to the lower-than-advertised gas mileage.

For example, a customer whose car got 26 miles per gallon instead of 27 and drove 15,000 miles would wind up using 21.4 more gallons because of the inflated mileage. If the local gas price is $3.59 per gallon, the companies would pay the customer $76.83. Hyundai and Kia are adding a 15 percent premium for the inconvenience, so the customer would get about $88.

So far no U.S. consumer class action lawsuit has been launched against the companies. A class action lawsuit has been launched in Canada, however.

UPDATE 1: Hyundai and Kia reached a $400 million class action lawsuit settlement in February 2013, which was announced in December 2013. 

UPDATE 2: A group of breakaway Class Members filed an objection to the proposed Hyundai Kia class action lawsuit settlement, calling it “unreasonable” and “unfair” to consumers.

UPDATE 3: A settlement has been reached in a class action lawsuit alleging Hyundai Motor America and Hyundai Motor Company misrepresented the fuel economy of certain Hyundai vehicles. Consumers who purchased or leased certain Hyundai vehicles could be eligible for a cash payment or other benefits. Learn more at the Hyundai Fuel Economy Settlement.

UPDATE 4: As of Apr. 11, 2016, six different appeals have been filed concerning the Hyundai Fuel Economy Settlement. Until the Court resolves those appeals, the Claims Administrator is unable to mail out settlement funds.