Toyota to shell out $1.4 billion to settle lawsuits

Toyota has announced that they have reached an agreement to resolve economic loss litigation in the US. Toyota has also announced a proposal to shell…

Toyota to shell out $1.4 billion to settle lawsuitsToyota has announced that they have reached an agreement to resolve economic loss litigation in the US. Toyota has also announced a proposal to shell out between $1.1 billion and $1.4 billion (Rs 7,700 crores) with relation to alleged losses and damages incurred during sudden and unintended acceleration of vehicles between 2009 and 2010. Details of this settlement will include installation of brake override system on all 3.25 million vehicles which were recalled due to floor mat entrapment.

$250 million will be to compensate for loss of value by former Toyota owners who sold their vehicles during the September 1, 2009 and December 31, 2010 period. It will also include $250 million to compensate current owners whose vehicles are not eligible for free brake override system. 16 million current Toyota owners will also receive a customer car plan and warranty for certain parts for between 3 to 10 years while $30 million will be towards various education grants for study of auto safety and driver education.

A notable fact is that investigations by National Highway Traffic Safety Administration and NASA engineers have ruled that electronics were not at fault in reports of sudden acceleration in Toyota vehicles which was only caused by faulty floor mats and driver’s error. For more information, scroll down.