A judge in San Jose has ordered Carmax, one of the country’s largest used automobile sellers, to pay a total of $1.1 million for failing to give car titles on time to its customers.
An investigation by the Santa Clara County District Attorney’s Office found that CarMax had a pattern over the last five years of late transfers of ownership on used cars bought by customers. Until ownership is transferred, a customer cannot resell, refinance, or use their vehicle as collateral for a loan.
The settlement, which was filed in Santa Clara County Superior Court, includes $900,000 in civil penalties, $150,000 in investigative costs, and $50,000 to support statewide consumer protection efforts.
District Attorney Jeff Rosen said CarMax cooperated with the investigation and quickly took steps to improve its compliance with consumer protection laws.
The case was brought by the district attorney’s offices of Santa Clara, Riverside, San Francisco, Ventura, and Los Angeles counties. This judgment follows a similar settlement these DA’s offices obtained in February 2025 with California AutoNation dealerships.
“Buying a car is a huge investment for many people, and that comes with the right to receive ownership on time,” Rosen said. “Dealerships, whether large or small, need to meet their legal deadlines.”
In California, used car dealers must submit to the DMV an application to transfer registration to a buyer within 30 days of the date of sale. That same 30-day deadline applies to the certificate of ownership, commonly known as the “pink slip.”
As part of the settlement, CarMax agreed to create and enforce policies to protect consumers so that they will receive registration and ownership paperwork in a timely manner.
These policies include: placing a hold on the sale of used vehicles when they do not have title in hand or a clear path to getting it within 30 days; requiring that a smog check or VIN verification is performed prior to any sale; training salespeople to ensure that vehicles on hold are not sold until it is lifted; and ensuring that a designated employee at the level of regional senior manager or higher is responsible for overall compliance.
