Kia and Hyundai settle lawsuit over vehicle thefts inspired by TikTok

Automakers Kia and Hyundai have agreed to a settlement in a California federal court, paying between $80 million and $145 million. This settlement resolves a class action lawsuit concerning a security flaw in certain vehicle models that made them easier to steal. The issue gained widespread attention after a TikTok video by @robbierayyy demonstrated the vulnerability, leading to an increase in thefts starting in July 2022.

The viral trend, known as the "Kia challenge," highlighted the absence of an immobilizer—a common anti-theft device—in these vehicles. As a result, thefts were shared on social media platforms, affecting various Hyundai and Kia models from 2015 to 2021. Notably, the Kia Optima, Hyundai Elantra, and Hyundai Sonata became some of the most stolen vehicles in America by 2022.

The surge in thefts led to an 85% increase in stolen Hyundais and Kias in Los Angeles alone, according to the Associated Press. This situation impacted auto insurance rates for owners of these vehicles. Progressive and State Farm stopped issuing new policies for the affected models in 2023, while insurance rates increased by 55% from 2020 to 2023.

Progressive commented on their policy changes: “We continue to insure existing customers who own these types of vehicles … We expect the limitations of these new business limits and pricing adjustments to continue changing as this issue evolves.”

The federal court consolidated over three dozen class action lawsuits against Kia and Hyundai into one case in Los Angeles in 2022. The automakers agreed to settle this case by late October. Under the settlement terms, payouts will be made ranging from $80 million up to $145 million. Plaintiffs can receive compensation for expenses like new key fobs.

Despite resolving these lawsuits, Kia and Hyundai face further legal challenges from auto insurers such as Allstate, GEICO, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, and USAA. These companies filed a class action lawsuit seeking compensation for claims paid on vehicles lacking anti-theft technology. A judge rejected Kia and Hyundai's request to dismiss this case last November.