FI showroom red and grey logo
MenuMENU
SearchSEARCH

Hyundai Drops Arbitration Clause

Following a critical piece in the New York Times on the arbitration clause found in its warranty statement, Hyundai drops the policy. The change came a week before the CFPB released its first report on the effect of arbitration agreements on consumers.

December 17, 2013
2 min to read


LOS ANGELES — On Dec. 6, Hyundai dropped a clause in its warranty that required some warranty disputes to be settled through binding arbitration. The change came a week before the Consumer Financial Protection Bureau (CFPB) issued its preliminary research on arbitration agreements, although Hyundai officials said the change was unrelated to the bureau’s release of its report.

Jim Trainor, company spokesperson, issued a statement to the New York Times that said, “We're dropping the arbitration clause because we don't want people to be misled and think we don't stand behind America's Best Warranty."

Ad Loading...

Trainor added that the company has “only used arbitration about 10 times since 2006, to protect the company from unscrupulous mills.”

The decision to eliminate the policy came after the New York Times published a story which claimed it would disqualify car buyers from joining class-action lawsuits and make it harder to receive a refund if they purchased a lemon. Car buyers were able to opt out of the arbitration agreement, but only if they notified the company within 90 days of purchasing the vehicle.

“Under Hyundai's plan as outlined for 2013 models, an owner would pay up to $275 to help cover the cost of the arbitration proceeding. Hyundai said the policy helps consumers by making it simpler to resolve disputes without the expense of going to court,” read the New York Times report. “Critics of binding arbitration said it limits consumer choices and puts final decisions in the hands of someone working on behalf of the automaker.”

On Dec. 12, the CFPB released its first report on arbitration agreements. It indicated that arbitration clauses were often confusing and that very few consumers use arbitration. The research focused on credit cards and bank cards. The auto industry has long anticipated the bureau would go after arbitration agreements in auto transactions.

Trainer told F&I and Showroom magazine that the removal of the arbitration clause from its warranty was in response to the New York Times’ article, and that the decision was unrelated to the CFPB’s report.

Ad Loading...

“The way you've characterized the situation you make it seem like we don't care about our customers,” Trainor told the Times. “Nothing could be further from the truth.”

More F&I

Industryby StaffMarch 6, 2026

Explore the 12 Rules for an F&I Life at EFI

EFI 2026 will take place April 13–15 at The Cosmopolitan Las Vegas.

Read More →
F&IMarch 4, 2026

Creating Your Own Economy

In this video, Reese Dailey explains how effective follow-up drives better results across the dealership, including increased sales, higher F&I penetration, and stronger customer retention.

Read More →
Industryby StaffMarch 2, 2026

Prove You Can Do F&I at EFI

‘So You Think You Can Do F&I’ is a live role-play contest taking place at the 2026 Ethical F&I Managers Conference.

Read More →
Ad Loading...
Two hands holding tiles that spell YES and No on a black background
F&Iby Hannah MitchellMarch 1, 2026

Expect Yes in the F&I Office

It may be human nature to back off when a customer seems to say no to a product or service. But experts say F&I managers should operate as though the answer will be the opposite.

Read More →
Industryby Lauren LawrenceFebruary 25, 2026

Report Finds Year-End F&I Strength

Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.

Read More →
Industryby Hannah MitchellFebruary 23, 2026

Some Auto Brands Cheaper to Insure

A new top 10 list ranks the least expensive for average full insurance coverage on a clean driving record and high driver credit scores.

Read More →
Ad Loading...
F&IFebruary 13, 2026

Business Office Blueprint

Try following these 20 steps to greater success in the dealer F&I office this year.

Read More →
Industryby Lauren LawrenceFebruary 11, 2026

Insurance Shopping on the Rise

A TransUnion study found that relationship-driven sales models proved to be important, as consumers who used an agent had a lower shopping intensity than those going it alone.

Read More →
Industryby Hannah MitchellFebruary 4, 2026

Auto Insurance Cost Reprieve

2025 brought consumers relief after years of rate hikes, but 2026 could bring renewed policy pain, depending on how U.S. trade policy affects prices.

Read More →
Ad Loading...
Reese Dailey from Automotive Training Academy by Assurant
F&IFebruary 4, 2026

Cash Deal Strategies

In this video, Reese Dailey of the Automotive Training Academy by Assurant reveals strategies to make cash deals profitable without relying on monthly payment bumps.

Read More →