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I am currently facing this same issue. I bought Hyundai Santa Fe from a Hynundai Dealership and in less than 3months i took the car back to them for a check and they diagonized BCT failed. The service Manager told me it was covered at no cost to me. I even bought extended warranty. Hyundai started tossing me about, telling me that their team declined to change the engine. The warranty company declined too, saying that they cannot pay for something that was denied by Hyundai. I only sense mischief because these guys musy have intentionally sold the bad car to me. Please does anyone know what next action for me to take. I am thinking of litigation. Is there a government agency that protects the right of the people from such intimidations?
You might want to follow this post: Engine replacement cost due to oil consumption
 
So this past weekend my engine failed while driving on the highway and had to be towed to the dealership. Dealership has confirmed it is the known issue with the Theta II engine and has put in for a replacement via warranty and is currently awaiting an answer from Hyundai. The service manager mentioned that Hyundai might try to deny it for any variety of reasons, fingers crossed they won't. In preparation, I have pulled all my service records from every dealership and Valvoline that I have had work done and the vehicle has been maintained well. Vehicle has 117,000 miles on it. Has anyone had any experience with this? What is the likelihood they will deny me?

At this point I still owe on the loan but it's probably less than what this repair will cost if I have to pay it outright. Terrible position to be in but trying to figure out options just in case. If they do deny me, what is my recourse?
From what I’ve seen in forums, Theta II engine issues are super common, and Hyundai extended warranties for many of these (often up to 150k miles). Your 117k miles might still qualify, which is good.

Your detailed service records are key—manufacturers rarely deny when maintenance is documented. Fingers crossed they approve it, since this is a known issue.

If they do deny, push the service manager to escalate to Hyundai’s regional team. Reference their extended warranty for Theta II engines. You could also file a complaint with NHTSA if needed—they track these defects.

You’ve done everything right with maintenance—hopefully they honor it. Keep us posted!
 
July 18 update... The dealership took care of a few issued recalls on the Santa Fe and explained that they would need to check our oil level after 1000 miles. (Why we were never notified of the recalls that were needed I don't know?)

The service tech explained that they would look at the oil level after the 1000 miles and that if it showed to be burning oil, they would do some sort of engine flush and cleaning. After that the flush and oil refill, we then we would need to drive the Santa Fe for another 1000 miles. And again they would check the oil level. If the oil consumption was deemed to be excessive, they would then replace the engine.

So right now we are just putting miles on the car and will take it back for them to have a look.
It's not just the burning oil and adding a quart here and there. We did that, and one of our sparkplugs blew at 103k and trashed the motor. We were over the 100k warranty and I was concerned they wouldn't cover it. They covered 95% of a rebuilt motor, so I was pleased. Apparently, if a motor dies before 65k you get a new motor. After that, you get rebuilt. They still magnaflux the block for cracks before putting new parts in, so that's good.
 
I had the same issue. The dealership was incredibly accommodating. My vehicle was out of warranty. But they ran a test over 1000 miles 2x. Made the consumption determination. Replaced the motor. Provided a rental, no cost. I had checked my oil on my own, noticed it was low, took 3 1/2 quarts. Had been serviced 2 months earlier. I was very fortunate. Because I had a long trip ahead of me, and I’m old school. So I always check the vital stuff.
 
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