ORLANDO, Fla. – A viral TikTok trend known as the “Kia Challenge” helped fuel a nationwide surge in thefts of certain Hyundai and Kia models beginning in 2021. Now, five years later, the two Korean automakers are attempting to tamp down the public relations criticism that won’t go away with yet another multi-million dollar settlement – one that has drawn praise from some and head shaking from others.
The recently announced $9 million settlement is in response to a multi-state consumer-protection lawsuit brought by 36 attorneys general (including Florida) to resolve specific claims about how Hyundai and Kia handled a known theft vulnerability of some of their older vehicles.
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Unlike many of their competitors at the time, certain Hyundais (2015-2021) and Kias (2011-2021) with turn-key ignitions were vulnerable to theft because the cars and SUVs lacked basic anti-theft protections like electronic immobilizers, key fobs, and push-button ignitions. In an effort to cut costs, Hyundai Motor Group (parent company of Hyundai and Kia) relied on traditional steel keys and ignition systems, in essence leaving hundreds of thousands of vehicles without any meaningful electronic or physical deterrent for theft.
Under terms outlined in the settlement, the two automakers will pay $4.5 million to states to cover investigative costs, and another $4.5 million in capped restitution for owners whose vehicles were damaged or stolen. Additionally, Hyundai, Kia and state officials estimate up to $500 million in costs for rolling out new zinc‑reinforced ignition cylinder protectors and anti-theft software upgrades.
An estimated seven-to-nine million cars could be eligible for fixes. Eligible owners with a “qualifying theft” can claim up to $4,500 for total loss, up to $2,250 for partial loss, or up to $375 for damage from an attempted theft. Notifications should start going out in early 2026 and vehicle owners will have up to one year from the time they are notified to visit a dealer for the upgrades.
Critics, however, say $4.5 million is not nearly enough to cover actual costs when victims factor in expenses like towing, deductibles, higher insurance premiums, and lower resale values. And good luck qualifying.
To qualify, the theft must have occurred after April 29, 2025 (and before the vehicle received an ignition-cylinder protector), or no later than March 31, 2027, whichever comes first. At the time of the theft, your vehicle must have had the software upgrade or had an appointment scheduled for the upgrade.
Curious as to whether or not your car is eligible for the upgrades? Check out the full list of affected cars here at the Hyundai/Kia Multistate Immobilizer Settlement webpage. One final thing: Once the settlement money is gone, it’s gone. Hyundai and Kia will not add more money once funds are exhausted.
If you’ve been following the perils of Hyundai and Kia vehicle thefts, you may be wondering, “Wasn’t this lawsuit already settled a couple of years ago?”.
Yes, and no.
So, down-the-rabbit-hole we go (with apologies in advance because this is going take a bit).
For years, the Hyundai/Kia anti-theft vulnerability was largely known only to experienced car thieves until July of 2022 when a TikTok user in Milwaukee using the handle @robbierayyy posted a video demonstrating how easily a Kia could be started using a screwdriver or the plug on the end of a USB stick or USB cable.
The post effectively turned the little-known exploit into widespread public knowledge. And although the video (with the hashtag #kiaboyz) was up for just 13 days before TikTok took it down, the damage was done and the floodgates opened. Over the next 12 months, thefts of Hyundais and Kias soared across the country.
In Los Angeles, the rate at which vehicles from both manufacturers were stolen jumped 85%. Seattle authorities broke the numbers down individually: Kia thefts rose over 300% and Hyundai thefts rose over 500%. In the Twin Cities of Minneapolis and St. Paul, reported thefts of the two brands in 2021 were 384. One year later, data showed thefts had skyrocketed to 3,293, an increase of 758%.
And in Milwaukee, ground-zero for the original #kiaboyz post, the city was way ahead of the trend: In 2020, they had a total of 895 Hyundais and Kias stolen – by 2021 that number was up to 6,970, a jump of 679%. The simplicity of being able to break into and steal certain Hyundai and Kia models led some insurers to blacklist coverage of certain cars and SUVs in some states.
Owners fought back, starting in the courts.
In 2021, a wave of class-action lawsuits was filed across the country against Hyundai Motor Group, starting in Milwaukee with Marvin et al. v. Kia America, Inc., et al. (Case No. 2:21-cv-01146). Plaintiffs claimed the automakers knowingly cut costs by omitting engine immobilizers, failed to warn consumers about the heightened theft risk, and left owners financially exposed to theft, vandalism, higher insurance premiums, and diminished vehicle value.
Over the following year, similar lawsuits from across the country were all consolidated into one federal multidistrict litigation (MDL No. 3052), a move designed to streamline pretrial proceedings and coordinate discovery. The consolidation, based in California, set the stage for a single, high-stakes legal showdown over whether Hyundai and Kia should be held responsible for millions of vehicles that owners say were uniquely easy to steal.
The case never made it to trial.
On May 18, 2023, the automakers proposed a settlement they said was worth $200 million. That figure, however, was misleading: although $145 million was earmarked for out-of-pocket losses suffered by owners, the settlement bundled together potential payouts and the companies’ own estimated costs for anti-theft software upgrades, hardware (up to 65,000 steering-wheel locks), and administrative expenses.
Under the proposal, owners whose vehicles were stolen and deemed a total loss could seek up to $6,125. If your Hyundai or Kia was damaged, or you lost personal property during a theft, you could seek up to $3,375. In the settlement, there were also smaller reimbursements outlined for insurance hikes and other related expenses.
Lawyers on both sides agreed to the deal, but the judge overseeing the case wasn’t convinced.
On Aug. 16, 2023, U.S. District Judge James V. Selna declined to grant preliminary approval of the settlement, finding it was not “fair, reasonable, and adequate” under federal class-action standards (Rule 23). The central problems: While $145 million was referenced for victim compensation, that money was earmarked but not guaranteed. Judge Selna questioned, among other things, the flat payout caps, the lack of expert support for damage estimates, a potential $10 million reversion to the companies if claims fell short, and questions about the anti‑theft software’s effectiveness.
Moving forward, the entire deal wasn’t thrown out, just restructured.
On Oct. 31, 2023, Judge Selna granted preliminary approval to a revised settlement, with the $145 million set aside solely for consumer compensation and structured to eliminate the $10 million reversion. Payouts would also be tied to the Black Book vehicle value.
Claim notices started going out in early 2024 – by Oct. 2024, Judge Selna had granted final approval. Originally, claims had to be submitted by March 30, 2025, but that deadline was extended to April 28, 2025.
Are we done? Are court proceedings over? Have people gotten their money?
Nope to all above.
In November of 2024, two separate class members from the consolidated suit appealed Judge Selna’s decision to the Ninth Circuit Court of Appeals. So until the Ninth Circuit hands down its decision, “approved settlement payments cannot go out to class members.”
So, for right now, the $145 million payout is held up in appeals, and the $9 million payout has gone through.
Now are we done? Nope, I got one more for ya:
In addition to consumers suing Hyundai and Kia, and state attorneys general suing Hyundai and Kia, insurance companies are also suing Hyundai and Kia. As part of the MDL No. 3052, there is a “subrogation” track.
As briefly as possible: subrogation (specific to the insurance industry) is when an insurance company takes on the role of the insured to pursue a claim against an entity. Person 1 gets into a crash that is the fault of Person 2. Person 1’s insurance company pays out a claim to Person 1, and Person 2’s insurance company pays out a claim to Person 2. Once that’s done, Person 1’s insurance company can now go after Person 2’s insurance company in an effort to seek damages and cover their payout to Person 1 (because in their eyes, the crash was the fault of Person 2).
So how does this relate to Hyundai/Kia? Hundreds of insurance companies are seeking to claim funds they have paid out to their policyholders. The price tag: $1 billion! In November of 2023, Judge Selna agreed with the insurers that there was a viable argument that because of a lack of anti-theft devices, thefts were a “predictable consequence” of the two automakers’ actions. As of right now, the subrogation track of the consolidated lawsuit is still proceeding. If you want to keep up with this part of the case, follow this link.
If you’ve stayed with me this long, Bravo! Let’s close out with some practical advice:
First, the $9 million state settlement is entirely separate from the still-stalled $145 million federal class-action payout and the insurance subrogation proceedings.
If you’re a Hyundai or Kia owner, your next steps depend on which bucket you fall into. If you own an eligible vehicle that still hasn’t had the anti‑theft upgrades, start with visiting this Hyundai/Kia Multistate Immobilizer Settlement page to see whether or not your car qualifies for the zinc‑reinforced ignition protector and software fix. Also, keep an eye out for mail or email notices over the next year. Again, if you feel you have a claim that falls between April 29, 2025, and now, visit that site.
As for getting a piece of the $145 million settlement, the window for those claims has closed. If, however, you already filed a theft‑loss claim in that $145 million federal settlement, understand that payments are paused until the Ninth Circuit rules on the appeals, but you should still keep your contact information current on the Hyundai and Kia settlement portals so you don’t miss any future correspondence. A decision by the Ninth Circuit could come in 2026, but don’t be surprised if things aren’t settled until 2027.
Good luck!