Defective Fuel Pump Settlement Will Cost Toyota $180 Million

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But it's not admitting guilt.

Toyota is on the verge of settling a class-action lawsuit for the infamous low-pressure fuel pump recall. The recall affected 3.36 million Lexus and Toyota models made from 2013 to 2020, including the entry-level Corolla and high-end Lexus LS 460.

The recall was issued once Toyota discovered that the fuel pump could stop operating, causing the vehicle to stall and not start up again. As part of the recall, Toyota replaced every fuel pump with a higher-qualify pump, more befitting of its treasured reputation for reliability.

Still, owners and lessees were granted permission to file a class-action lawsuit against Toyota. According to Reuters, the settlement will potentially cost Toyota more than $150 million.


Denso, the manufacturer of the low-pressure fuel pumps at the root of the case, was also named in the lawsuit. The settlement is preliminary at this point and only requires a judge's autograph.

Once the settlement is signed, Toyota and Denso will start paying their customers, though part of the agreement is that neither company admits to wrongdoing. This kind of settlement is not unusual. Earlier this year, BMW settled on a case related to sales inflation without having to admit guilt.

"We are pleased to have resolved this litigation in a way that demonstrates our commitment to providing customers with a great ownership experience," Toyota stated.


The plaintiff's attorney, Dee Miles, agreed they would receive a "full remedy." "The value of the settlement is still being analyzed by experts, but based on the initial analysis, we fully expect that settlement value to exceed $150 million," said Miles.

Under the terms of the settlement, Toyota will extend the warranty for the new pumps to 15 years or 150,000 miles, which is a lot more than the standard three-year/36,000-mile basic warranty every new Toyota product is sold with. Toyota will also provide loaner vehicles and tow the car to a dealer if required.

In cases where the repairs have already been made, Toyota will reimburse the customer. Customers will also be refunded if they paid for a loaner or rental vehicles and towing services.


It's believed that the various law firms representing the plaintiffs will seek legal fees, which in this case is roughly $28.5 million.

While $180 million is a lot of cash to hand over, it's small fry compared to the legal battles Toyota is facing in Australia. Toyota was recently found guilty of selling 264,000 Fortuner, Prado, and Hilux vehicles with faulty diesel particulate filters between October 2015 and April 2020. As a result, these vehicles lost value, spewed harmful emissions, were less fuel efficient, and suffered premature wear and tear.

If every customer with one of these vehicles filed a claim, the bill could easily exceed $1.5 billion.

Source Credits: Reuters

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