Toyota class action payout: What you need to know

Due to a recent Federal Court ruling handed down in April, hundreds of thousands of Toyota owners will be able to apply for compensation. The judgement is the result of a successful class action suit against Toyota which argued that more than 260,000 vehicles of select models were defective when sold. So what exactly can you get a Toyota class action payout for, and who can claim one? We’ll explain it all in this article.

Background

When issues with some models and makes of Toyota vehicles had been flooding mechanics for years, in 2019, Toyota launched a campaign offering customer service rather than recalling the faulty vehicles. Faulty vehicle owners were not impressed. 

Toyota told the ABC in August 2019 that Toyota dealers would “reprogram the engine control module, ensure the DPF has been regenerated, and conduct a smoke test” and replace the DPF if the smoke test is negative. It went on to say that the inspection and replacement would be free of charge to customers.

The Toyota class action suit

The class action suit judgement found that hundreds of thousands of Toyota HiLux, Prado and Fortuner vehicles sold between October 2015 and April 2020 had faulty diesel particulate filters (DPFs). The DPF is designed to trap and burn soot from diesel while the engine is running, but Toyota owners around the country were reporting theirs was getting blocked and causing a range of other problems.

A diesel particulate filter, the part found to be faulty in some Toyota vehicles.

The Federal Court also ruled that Toyota had conducted misleading or deceptive marketing to sell the cars, and quantified the decrease in value caused by the defects at 17.5% of the vehicle’s value. That is the figure used to calculate the relevant payout for each vehicle.

Vehicle faults 

Lawyers with the firms representing the class action members, Bannister Law and Gilbert and Tobin Lawyers, alleged in the suit that the faulty DPFs were causing:

  • a dramatic decrease in fuel efficiency, 
  • foul-smelling fumes to spew from the exhaust, when raw diesel comes out of the tailpipe with a mixture of steam and sulphuric acid,
  • general excessive wear and tear on the engines, and
  • In some cases, sudden power loss.

The result is a serious drain on time and money for the owners of the defective vehicles. The inconvenience and disruption of having to return time and again to get the same DPF issue fixed was taken into consideration when determining the payout amounts.

Toyota class action payout: the consequences

With around 260,000 faulty vehicles known to have the faulty DPF, and an expected average compensation payout of $10,500 per vehicle, it is estimated that Toyota will face a crippling compensation bill of $2.7 billion. 

With the manufacturer already struggling after a prolonged chip shortage and supplier delays, time will tell what this means for Toyota.