Reduced Economy Ratings May Drop Hyundai and Kia Resale

Hyundai and Kia announced on November 2 a voluntary initiative to reduce some of its cars' fuel economy ratings. The reduction affects about 900,000 vehicles sold between the 2011 and 2013 model years and decreases Hyundai and Kia's average fuel economy from 27mpg to 26mpg. Depending on the vehicle, fuel economy can be reduced by as much as 4mpg, but most cars only see a 1mpg reduction in ratings. The companies are sending a pre-paid debit card plus 15% for the difference in the ratings to all affected customers based on region. 

The question now is what effect will this have on Hyundai and Kia's resale value in the US? Whie none of their vehicles have a 40mpg rating anymore, many of them are still rated at 38 or 39mpg, which could represent a good value to second-hand customers and a loss in value to current owners. 

"Experts tell us any impact on residual values will be very small or zero. When taken in context with the 15% premium we are applying on top of full lifetime gasoline reimbursement costs, we think our reimbursement plan shows our focus on making this right for our owners," said Hyundai spokesperson Jim Trainor.

In the near term, the reduction may lower the resale value on Hyundais and Kias, but experts predict that it will not have much impact on the long term because the reduction for most models is so small. 

"The American public can be pretty forgiving, pretty quickly," said Larry Smith, a consultant to the Institute for Crisis Management.

Source: USA Today