What is a car settlement?

Car-related legal settlements are arrangements for compensation of damages suffered by a party due to an automotive accident, manufacturing defect or other issue. Most settlements result in compensation in the form of money. While the majority of settlements occur between parties involved in automobile accidents, settlements resulting from legal actions against vehicle manufacturers by individuals or aggrieved classes are also common.

Damages from automobiles that may be compensated through a legal settlement can encompass physical and mental harm as well as financial losses. Legal settlements from cases involving automobiles may be imposed by court order after a full trial or may be negotiated settlements agreed on by all the parties involved in the dispute; the latter case is common in situations where the parties seek to avoid a trial due to the expense and length of court proceedings or the potential for additional losses from a judgment.

While accidents are the most common reason for legal action, negligence or false claims by a vehicle manufacturer may also lead to a settlement. For example, owners of certain Hyundai vehicles built between 2011 and 2013 reached a settlement with the company to defray fuel costs for those vehicles, as the actual fuel economy those drivers achieved with their vehicles was substantially lower than Hyundai's claimed fuel economy figures.