CarMax has agreed to pay $1.1 million to settle a consumer protection lawsuit prosecuted by multiple district attorneys’ offices, including Los Angeles County, alleging the company failed to timely transfer ownership of used vehicles to buyers, it was announced Wednesday.
The case, brought by prosecutors in Los Angeles, Santa Clara, San Francisco, Ventura, Sonoma and Riverside counties, alleged that since 2019 the company repeatedly failed to submit required registration and title transfer documents to the California Department of Motor Vehicles within mandated deadlines.
CarMax did not immediately respond to a request for comment.
“This judgment sends the clear message that car dealerships must follow California law or pay the price,” Los Angeles County District Attorney Nathan J. Hochman said in a statement. “Consumers who buy a used car rightfully expect the dealership to comply with California law and transfer registration and ownership on time.”
Under the settlement, approved Tuesday by a Santa Clara County judge, CarMax must implement new compliance measures, including ensuring it has proper documentation before selling vehicles and sufficient staff to process registration paperwork.
The company will pay $900,000 in civil penalties, $150,000 in investigative costs and $50,000 in restitution, according to Hochman.
Prosecutors alleged CarMax delayed transferring ownership in thousands of cases, leaving buyers without timely legal title to their vehicles.
CarMax cooperated with the investigation and resolved the case without admitting liability, according to prosecutors.