Honda agrees to pay $605 million to settle buyers' claims related to Takata airbags

Japanese automaker Honda has agreed to a $605 million settlement to pay for buyers' claims related to Takata airbags in the US, www.engadget.com reported citing The Financial Times and Reuters. The money Honda set aside will go towards paying for all the out-of-pocket costs and lost wages incurred by customers for repairs of Takata airbag-equipped cars repaired.

The Financial Times, reported that part of that amount will also be used to create an outreach programme aimed at speeding up the pace of the recall as also as the replacement of recalled parts.

If the court were to approve Honda's offer to pay, it'll be the biggest among all Takata-related settlements. Earlier this year, Toyota, Subaru, and Mazda agreed to a $553 million settlement, while Nissan settled a class-action lawsuit for $97.7 million.

According to commentators, this is as it should be as Honda is Takata's biggest customer: among the 18 deaths related to the company's rupture-prone airbags, 17 happened in Honda vehicles.

According to commentators, Takata has been in trouble over its airbags for years. Though the issue of the airbags exploding violently has been around for years, it assumed serious proportions when the Senate accused the company of faking crash data in 2016, leading to the biggest auto recall in the US. (See: Dangerous Takata airbags in biggest-ever US recall)

Meanwhile, the settlement, which will need the approval of a federal judge, covers owners of 16.5 million Honda and Acura vehicles with the air bags dating back to 2001. The vehicle owners get up to $500 each.

Under the deal, Honda would get credit for the $121 million it spent on rental cars for customers who had to wait for parts. That would leave $484 million, of which Honda will spend $199 million over four years finding owners with unrepaired cars and encouraging them to get the inflators replaced.

The rest will go toward attorney fees and to reimburse owners for expenses such as rental cars and lost wages. Owners would need to apply to a court-appointed administrator for the money and they can also make claims that their cars dropped in value.