CarMax Under Fire Over Sales of Recalled Vehicles

Eleven consumer groups petitioned the Federal Trade Commission to investigate used car retailer CarMax for its sale of recalled vehicles.

The organizations claim that the nation's largest seller of pre-owned cars falsely advertises all used vehicles as "CarMax Quality Certified," while failing to ensure that safety recalls are performed before consumers drive those cars off the lot.

"CarMax is playing recalled used car roulette with its customers' lives," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS), the Sacramento-based group spearheading this initiative.

According to CARS, federal law prohibits auto dealers from selling new cars currently under a safety recall. But there is no complementary law protecting used car buyers.

In fact, CarMax recently helped halt California's pending first-in-the-nation legislation, which would prohibit car dealers from selling recalled used cars without safety recall repairs.

The retailer fought back against the accusations, saying in a statement that new car manufacturers do not give used car dealers the authority to complete recall repairs. Instead, CarMax provides information for customers to register their vehicle with the original manufacturer to learn about open recalls, and be notified when future retractions are made.

But that's not good enough for CARS and its fellow activists, who called the fact that CarMax can not make repairs itself "no excuse for selling consumers unsafe, recalled cars."

CarMax is not, however, opposed to the changes suggested by the 11 non-profit groups, like a legal mandate that manufacturers fully enable companies like CarMax to make repairs.

"The legislation should require manufacturers give used car retailers all recall notices, the same diagnostic and repair information, and the tools and parts that manufacturers make available to their franchise dealers," the company said.

Filed on Monday, the lobbyists' petition seeks "enforcement action" from the FTC to "curb CarMax's deceptive advertising and sales practices." The agency was tagged for the job, as the National Highway Traffic Safety Administration (NHTSA) does not retain authority over new and used car dealers.

"Bottom line," the petition said, "there is absolutely no excuse for CarMax or other auto dealers not to ensure that the use vehicles they sell to consumers are not ticking time-bomb cars with unrepaired safety recalls."

New York Senator Charles Schumer lent his clout to the fight, submitting his own letter to the FTC in support of the 11 consumer groups.

"Car dealers shouldn't sell used cars that have a safety recall to consumers, period," Schumer, a New York Democrat, said in a statement. "Far too many times we have seen the tragic and often fatal consequences when deficient cars are allowed on the road, and it's time for the FTC to do everything it can do put a stop to it."