CarMax settles lawsuit over registration filing delays

Dealership to pay $1.1 million in fees and penalties, implement new policies to address issues

Mar. 26, 2026 at 11:25pm

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CarMax Auto Superstores Inc. has settled a consumer protection lawsuit with several California counties, including Riverside and Los Angeles, over allegations that the dealership regularly failed to properly handle vehicle registration transfers and ownership filings in a timely manner. Under the settlement, CarMax will pay $1.1 million in legal fees and penalties and implement new policies to rectify the issues.

Why it matters

The lawsuit highlights ongoing challenges with vehicle registration and titling processes, which can create headaches for consumers and regulators. The settlement requires CarMax to take steps to improve its compliance and oversight, which could set an example for other dealerships facing similar issues.

The details

The lawsuit, filed by the Riverside County District Attorney's Office along with agencies in Los Angeles, San Francisco, Santa Clara, Sonoma and Ventura counties, alleged that CarMax sales representatives were not complying with the 30-day DMV registration filing requirement after vehicle sales. There were also problems documented with certificates of ownership. Under the settlement, CarMax agreed to implement enhanced business practices, including placing sales holds on vehicles without clear title, completing necessary inspections prior to sale, and designating a senior manager to oversee compliance.

  • The lawsuit was filed last year and the settlement was reached earlier this month.
  • The timeframe covered by the lawsuit includes periods during the COVID-19 pandemic when vehicle title processing was impacted industrywide.

The players

CarMax Auto Superstores Inc.

A major used car dealership chain based in Richmond, Virginia.

Riverside County District Attorney's Office

The prosecutor's office that led the lawsuit against CarMax, along with several other California counties.

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What’s next

The settlement requires CarMax to implement the new policies and practices to address the registration and titling issues. The company has already initiated some corrective measures.

The takeaway

This case highlights the ongoing challenges dealerships face in navigating vehicle registration and titling processes, especially during disruptive events like the pandemic. The settlement shows that regulators are closely monitoring these practices and will take action to protect consumers when issues arise.