The CarMax lawsuit claims that the company engaged in a series of atypical, illegal, and fraudulent practices. It alleges that the company misclassified its employees as exempt from union representation, failed to adequately inspect and repair its used cars, and did not disclose recalls or other problems. Furthermore, the lawsuit asserts that the company’s “Quality Certified” vehicles have undisclosed defects that require repairs. Despite the allegations against CarMax, the company continues to operate in this way.
CarMax acted atypically, unlawfully, and often fraudulently
Plaintiff’s lawsuit alleges that CarMax acted illegally and fraudulently by transferring his car to a nonlicensed dealer without his knowledge or consent. The complaint states that CarMax breached its duty to the public by selling an unfit car and then transferring the car to a nonlicensed dealer. Although the ruling may not set a formal precedent, CarMax’s actions were illegal and deceptive.
The case is considered the first case involving used car sales that involve a consumer’s safety. It demonstrates that car dealerships must repair faulty vehicles. In another case, the retailer failed to fix an unsafe pickup and sold it as a “certified” vehicle. The Californian’s daughter nearly died when the truck he bought from CarMax was caught on fire, resulting in over $200,000 worth of damages.
In a recent lawsuit against CarMax, a California woman alleges that the company unlawfully sold her car without her authorization and resold it to an unlicensed dealer. CarMax has denied this and defended itself by saying that she didn’t provide proof that the car was defective. Despite these allegations, CarMax allegedly sold the car as retail to an unlicensed dealer in California, presenting it as a wholesale dealer-to-dealer transaction.
CarMax misclassified workers as exempt employees
A CarMax employee is suing the used-car company, alleging that the company misclassified 1,500 workers as exempt employees. Overtime pay is required under federal law, and CarMax failed to pay employees at least one-and-a-half times their regular rate of pay for overtime work. The FLSA also prohibits employers from misclassifying workers as exempt employees, a class that disqualifies them from receiving basic employee benefits and paying overtime.
CarMax’s Quality Certified vehicles have undisclosed recalls
One of the nation’s largest sellers of used cars, CarMax advertises that it’s Quality Certified vehicles go through a 125-point inspection. But a recent report by CARS Foundation and M & R found that a shocking number of CarMax’s cars have undisclosed recalls. The report cites various examples of defective cars sold at the company. It also cites a study by AutoNation, the largest new car dealership chain in the U.S., to show that CarMax has a history of marketing its cars to consumers.
Gutierrez’s lawsuit alleges that CarMax failed to disclose an unseen safety recall involving the stop lamp switch. This safety defect could fail the car’s push-button start system, an inability to operate the shifter from the park position, or an unintended illuminating of the “ESC” indicator lamp in the instrument cluster. Additionally, the failure of stop lamps could lead to increased crash risk. CarMax should be stopped from violating state consumer protection laws, says the advocacy group Consumers for Auto Reliability and Safety.
CarMax’s Quality Certified vehicles are supposed to ensure that its used cars are inspected, repaired
However, CarMax is letting customers down. The company has failed to repair safety recalls and is playing “car recall roulette” with the public’s safety. According to the CARS Foundation, President Rosemary Shahan, “CarMax is failing to repair recalled cars despite its Quality Certified designation.” She said the company had the opportunity to fix recalled cars before selling them but chose not to, and has lost her trust.
The CarMax Quality Certified program is aimed at used cars one to six years old and is akin to the certified pre-owned programs offered by manufacturer-sponsored dealerships. The company’s advertising boasts of a 125-point inspection, but the company has yet to provide proof of such a comprehensive inspection. CarMax is not responsible for the Davidson family’s accident. CarMax is a publicly-traded company and took in more than $10 billion in sales last year.