Toyota Truck Rust Settlement Covers 1.5M Tundra, Tacoma and Sequoia Vehicles

Toyota has agreed to pay nearly $3.5 billion to settle a class-action lawsuit over rust problems with certain pick-up trucks and SUVs, which claimed that premature corrosion of the vehicle frame may be caused by the automaker’s failure to adequately provide proper rust protection.

The rust settlement was proposed on October 31, according to a report by the New York Times, which may cover 1.5 million Toyota Tundra, Toyota Tacoma and Toyota Sequoia vehicles.

According to the terms, Toyota Motor Corp. has agreed to pay out $3.4 billion to cover inspections, repairs, and other associated costs due to early frame corrosion issues.

The class action lawsuit was filed in the U.S. District Court for the Central District of California over claims of premature corrosion issues, indicating that Toyota knowingly failed to apply adequate rust protection, leading to premature corroding of the vehicles’ frames and jeopardizing the vehicles’ structural integrity.

Following negotiations that began in March, parties finally reached the Toyota rust settlement agreement to resolve the litigation and compensate vehicle owners for inspection and repair costs, along with any out-of-pocket costs associated with the premature corrosion issues.

The vehicles included in the terms of the settlement include certain Tacoma trucks from model years 2005 through 2010, Sequoia vehicles from 2005 through 2008, and Tundra trucks from 2007 through 2008.

Under the terms of the proposed settlement, the automaker has agreed to replace any vehicles frame included in the scope of the litigation that is found through inspection to have perforation from rust measuring 10mm or greater.

Toyota has also agreed to pay for inspections of every vehicle included in the lawsuit, which is anticipated to cost about $90 million at $60 per inspection. The settlement calls for Toyota to inspect the vehicles for up to 12 years, from the day they were first sold or leased, to determine whether the frames need to be replaced. Any customer with a vehicle affected by the settlement who has paid for a frame replacement will be offered full reimbursement by the automaker.

In addition to the cost of inspections and frame replacements, the settlement terms call for Toyota to pay $9.75 million in attorney’s fees, $150,000 in costs and expenses, and $2,500 to each of the eight named class action lawsuit representatives. According to the settlement documents, Toyota has projected the cost per vehicle to be roughly $15,000.

Within the settlement negotiations, Toyota has agreed to set aside a separate portion of funds to advertise the class action lawsuit, the settlement terms, and the repair and reimbursement process to ensure all customers receive the entitled compensation.

Although Toyota Motor Corp. has agreed to the settlement terms, the automaker has yet to admit liability and has held true that nothing was improperly done during the manufacturing process leading to the premature frame corrosion.