CarMax Agrees to $1.1M County Settlement

CarMax Auto Superstores agreed in March to pay $1.1 million to settle a California consumer protection case alleging the company repeatedly delayed title and registration transfers for used-car buyers. The judgment, approved by Santa Clara County Superior Court Judge Jeffrey El-Hajj on March 24, resolved a civil enforcement lawsuit brought by district attorneys from Santa Clara, Los Angeles, Riverside, San Francisco, Sonoma and Ventura counties. Prosecutors said the company failed in thousands of instances dating back to 2019 to submit transfer paperwork to the California Department of Motor Vehicles on time and to deliver ownership documents within the deadlines required by state law. CarMax cooperated with the investigation and took steps to improve compliance, the Santa Clara County District Attorney’s Office said. ### Which counties brought the case, and where was it filed? Santa Clara County District Attorney Jeff Rosen’s office said the case was filed in Santa Clara County Superior Court and led by prosecutors from six counties: Santa Clara, Los Angeles, Riverside, San Francisco, Sonoma and Ventura. Sonoma County District Attorney Carla Rodriguez and Los Angeles County District Attorney Nathan Hochman were among the officials who announced the settlement on March 25. (da.santaclaracounty.gov) Ventura County District Attorney Erik Nasarenko said in a separate release that the action was a civil enforcement lawsuit over alleged violations of California consumer protection law tied to the sale of used vehicles. The counties said the judgment was entered in Santa Clara County because that court handled the case. (da.santaclaracounty.gov) ### What did prosecutors say CarMax did wrong? California law requires used-vehicle dealers to submit an application to transfer registration and the certificate of ownership within 30 days of the sale. If a timely application is rejected, dealers must resubmit a corrected filing within 30 days of the return or within 50 days of the sale, whichever is later, according to the Los Angeles County District Attorney’s Office. (da.venturacounty.gov) Prosecutors alleged that CarMax missed those deadlines in thousands of cases dating back to 2019. The complaint said the company failed to submit transfer applications within 30 days, failed to timely resubmit corrected applications, and failed to deliver certificates of ownership — commonly called pink slips — within the statutory deadline. Until ownership is transferred, buyers cannot resell, refinance or use the vehicle as collateral for a loan, the district attorneys said. (da.lacounty.gov) ### How is the $1.1 million payment divided? The settlement includes $900,000 in civil penalties, $150,000 in investigative costs and $50,000 in restitution or cy pres funds to support consumer protection enforcement efforts statewide, according to the county releases. Los Angeles County said the $150,000 in investigative costs would be split evenly among the prosecuting agencies. (da.santaclaracounty.gov) Santa Clara County said the payment was ordered as part of a stipulated judgment. The counties did not describe the case as a class action and did not announce direct payments to individual consumers in the releases reviewed. ### What changes does CarMax have to make? The judgment requires CarMax to adopt new operating rules aimed at preventing late transfers. (da.santaclaracounty.gov) County prosecutors said the company must place a sales hold on used vehicles if it does not have title in hand or a clear path to obtaining it within 30 days. The company also must make sure required smog certificates, VIN verifications and, where applicable, weight certificates are completed before a sale can proceed. The order also requires training so sales staff do not sell vehicles that are on hold, enough staffing to process title and registration paperwork, and a designated employee at the level of regional senior manager or higher to oversee compliance. Santa Clara County said CarMax had already begun improving its practices after the issues were brought to the company’s attention. (da.santaclaracounty.gov) ### What did prosecutors say about the settlement? Jeff Rosen said, “Buying a car is a huge investment for many people, and that comes with the right to receive ownership on time.” Nathan Hochman said the judgment showed dealerships “must follow California law or pay the price.” Erik Nasarenko said California consumers are entitled to prompt and lawful transfer of registration and ownership documents. (da.santaclaracounty.gov) March 24 is the key date in the court record because that is when Judge El-Hajj signed the judgment, according to Los Angeles County and other county releases. March 25 is the date the counties publicly announced the settlement, and the next concrete step is CarMax’s compliance with the injunctive terms laid out in that judgment. (da.sonomacounty.ca.gov) (da.santaclaracounty.gov)