Toyota Settles in Sludge-Damage Suit

Toyota has agreed to settle with thousands of Toyota and Lexus owners who claimed their engines were ruined by oil sludge build-up even though they followed maintenance guidelines. The agreement covers eight Toyota and Lexus models sold in the late 1990s and early 2000s, including the Camry sedan, Sienna minivan, Highlander SUV, and Lexus ES 300. The number of covered vehicles could reach 3.5 million.
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The case began when a Lexus RX 300 SUV bought by a New Orleans stockbroker in late 1998 had its engine fail due to sludge damage after just two years and 42,468 miles. The settlement comes as Toyota struggles to cope with a wave of recalls that has hurt the company's reputation for rigorous quality control.

Toyota is not the only carmaker with sludge issues — DaimlerChrysler, Volkswagen, and Saab have all fielded numerous complaints from consumers about sludge-damaged engines. Those companies now have to worry that the precedent set by this settlement could put them next in line.

 

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