CarMax settles vehicle recall disclosure investigation with 36 state AGs for $1M

CarMax investigation settlement overview: 

• Who: Used car dealer CarMax has reached a $1 million settlement with 36 states.
• Why: The settlement resolves claims that CarMax did not provide consumers with information about safety recalls on critical vehicle parts. 
• Where: The agreement was reached with 36 states.

Used car dealer CarMax has reached a $1 million settlement with 36 states to resolve claims that it did not provide consumers with information about safety recalls on critical vehicle parts. 

The agreement was announced by state attorneys general Dec. 1. 

CarMax did not provide consumers with information about safety recalls on critical vehicle parts, such as brakes and fuel pumps, before selling vehicles, a statement from the New York Attorney General’s Office said. 

“Today’s agreement will set a new industry standard for used car dealers to disclose open safety recalls to customers before they make a purchase.”

The settlement came after a multistate investigation found that CarMax misled consumers by failing to disclose needed repairs on vehicles with open safety recalls. 

CarMax classified those vehicles as “safe” despite there being open recalls for parts, including airbags and other critical safety features, the states said.

CarMax to change its business practices

As well as the financial settlement, the agreement requires CarMax to change its practices in the used car market to protect consumers. 

Under the agreement, CarMax is now required to provide digital links for vehicles advertised online and QR codes for vehicles available on their lots which will allow consumers to access this information as they shop.

“When someone buys a car, they need to know that it will keep them safe,” New York Attorney General Letitia James said. 

“CarMax put New Yorkers at risk by allowing drivers to get on the road without warning them that their newly purchased vehicles had open safety recalls. This agreement will protect New Yorkers and ensure that consumers are aware of any safety recall before they start driving.”

CarMax will also present customers with documentation on any open safety recalls and obtain their signature to confirm proper disclosure before presenting them with any sales paperwork. The company will pay $1 million in penalties. 

In 2021, Carmax was hit with a class action lawsuit alleging it unlawfully sells vehicles that don’t meet emissions standards, and fraudulently completes title certificates to unlicensed dealers.

What do you think of this settlement with CarMax? Let us know in the comments! 

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