In March 2007, two Honda Civic Hybrid owners filed a class action lawsuit against Honda because their cars were averaging 31 miles per gallon—well below the advertised 49 mpg in the city and 51 mpg on the highway. The news this week that Honda offered to settle the suit has done little to resolve the case, or the larger problem of Environmental Protection Agency mileage estimates commonly overstating real world mileage.
In fact, in response to the proposed settlement, 26 state attorneys said the settlement was “not fair, adequate or reasonable.” The two main plaintiffs will split $22,500, while their attorneys will get $2.95 million in legal fees. But it’s the settlement for the 158,639 people who owned or leased a 2003 through 2008 model Honda Civic hybrid that is most confounding.
- Dissatisfied owners who trade in their Honda Civic Hybrid could get up to $1,000 rebate on some vehicles—but not Honda’s most fuel-efficient vehicles, such as the Honda Insight, Honda CR-Z and the newer version of the Honda Civic Hybrid. Instead, they’d have to purchase a conventional gas-powered Honda model likely to get lower fuel economy than a Civic Hybrid.
- Honda would send nearly 160,000 current and former Civic Hybrid owners a DVD containing tips on improving fuel economy.
- Honda will agree to drop one claim in one advertisement for two years, saying that “mileage will vary,” not “mileage may vary.”
- Owners who don’t want to sell their Civic Hybrid can get a $500 discount for a new or used Honda model, which can be transferred to immediate family, or those who don’t want to buy a new car can get $100.
Honda denies any wrongdoing, noting that estimates were calculated by the EPA, which the company simply used in advertising. The suit doesn’t challenge the methodology used by the EPA to predict mileage but says Honda deceived consumers by not making it clear that they were unlikely to achieve the agency’s figures.
Year 2008 and later Civic Hybrids aren’t included in the suit, because the EPA changed the methodology for calculating average fuel economy for hybrids last year. Under the new methodology, Civic Hybrids since the 2008 model year are rated at 40 mpg in the city and 45 mpg on the highway. New EPA tests to better reflect real-world driving conditions were unveiled in December 2006. They dropped city fuel economy for all vehicles by an average of 12 percent and 8 percent for highways.
Honda continues to insist that it’s done nothing wrong, but defended the proposed settlement as fair in court documents. Apparently, the company would be pleased to put the case to rest, with a settlement that could send more customers to showrooms. Greg Abbott, Texas attorney general, said that consumers will get “very minimal relief” and the real winner is Honda because it will sell more cars.
A New Era of Honesty
The 26 state attorneys filed their objections on Monday. US District Judge Virginia A. Phillips of California, who gave preliminary approval to the settlement, will consider the objections before deciding whether to issue a final approval.
Regardless of how the Honda Civic Hybrid case is resolved, the problem of overstated EPA mileage estimates, especially for hybrids and forthcoming plug-in cars, is likely to persist. However, the case does put automakers on full alert not to exaggerate mileage claims, and to be as direct as possible about acknowledging likely real-world efficiency levels.