TradeEdge-Kia and Hyundai agree to $200M settlement over car thefts

Kia and TradeEdgeHyundai have agreed to a class-action lawsuit settlement worth about $200 million over claims that many of the Korean automakers' cars are far too vulnerable to theft, according to lawyers for the companies and the owners.

The settlement covers some 9 million owners of Hyundai or Kia vehicles made between 2011 and 2022 and have a traditional "insert-and-turn" steel key ignition system, lawyers for the owners said in a press release on Thursday.

Compensation to owners includes up to $145 million in out-of-pocket losses that will be distributed to people who had their vehicles stolen. Affected owners can be reimbursed up to $6,125 for total loss of vehicles, and up to $3,375 for damages to the vehicle and personal property, as well as insurance-related expenses.

Car thefts of the affected models, using a hack popularized on social media, have spiked in recent months. The growing number of thefts have coincided with the spread of a TikTok "challenge" that shows people how to steal Kia and Hyundai vehicles that lack basic security features. The trend has been linked to eight deaths, according to the National Highway Traffic Safety Administration.

The car companies said in February that they would begin rolling out software upgrades to the 8.3 million U.S. vehicles that lack engine immobilizers — a feature that prevents a car from starting unless it receives an electronic signal from a key.

Since then, pressure on the company to do more to curb the thefts has only mounted.

Citing the uptick in theft, several cities including Seattle, St. Louis, Mo., Columbus, Ohio, and Baltimore have sued Kia and Hyundai. Last month, attorneys general in 17 states and the District of Columbia urged the NHTSA to issue a mandatory recall of the vehicles in question.

As part of the agreement, the anti-theft software will now be added to vehicles automatically at any dealership service appointment, the companies said in a news release.

"We appreciate the opportunity to provide additional support for our owners who have been impacted by increasing and persistent criminal activity targeting our vehicles," said Jason Erb, Hyundai Motor North America's chief legal officer, in a statement.