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"Is Your Used Vehicle a Timebomb? Loophole Lets Auto Dealers Sell Millions of Recalled Cars as 'Safe'"
by Diana Hembree
March 27, 2017
"Consumer advocates have been pushing to close the loophole that makes this possible. The fight intensified this February, when six consumer groups sued the [Trump Administration] Federal Trade Commission (FTC) over a consent order involving General Motors and two of the country’s largest auto dealers. The FTC had issued complaints against the three for failing to disclose that their used cars were recalled for safety problems that were never fixed. In its December 2016 consent order, the FTC allowed the companies to continue selling used cars that were recalled and never repaired as “safe” or “certified” – as long as they disclosed that the recall repairs had not been made.
FTC would allow dealers to advertise recalled cars with lethal safety defects, including catching on fire, as "safe."
Auto safety advocates lambasted the FTC’s decision.
'The consent order is crazy; it’s insane,' says Rosemary Shahan of Consumers for Auto Reliability and Safety (CARS), one of the consumer groups suing the FTC. 'It lets car dealers put death traps on the road. It’s worse than nothing because it actually gives car dealers a safe harbor if they sell a used and recalled car that hasn’t been fixed.'
....All the major car manufacturers had previously forbidden their dealers to sell used cars with unfixed recalls, says Shahan, but after the consent order Ford reversed gears and began selling them.
And Trump’s presidency makes it even less likely these loopholes will be closed, as the case of AutoNation suggests. AutoNation, the country’s largest car dealership, had pledged not to sell vehicles with open recalls, but, quietly backpedaled after Trump’s victory and resumed sales of vehicles with open recalls. According to Automotive News, CEO Mike Jackson concluded the change in government meant the death knell for legislative action on used vehicles with open recalls."
"Very Safe, Except for One Thing...
Legal Clash with FTC on Marketing of Used Cars"
by Paul Feldman
March 27, 2017
"Can a used car be marketed as 'safe' or 'certified' even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?
FTC would allow dealers to advertise cars are "safe" when they have killer safety defects that have not been repaired.
Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.
That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, D.C., by auto safety activists....
'The sale of "certified" used cars as "safe," "repaired for safety issues," or "subject to a rigorous inspection," when such vehicles are in fact not safe because they are the subject of pending safety recalls, is extremely detrimental to consumers who buy used cars—particularly poor, unsophisticated, and non-English speaking consumers,' declared the Center for Auto Safety and other safety groups involved in the case....
Under the consent order, the agency said dealers who market a vehicle as safe must have completed repairs on recall issues or disclosed clearly that the vehicle [may remain] subject to an open recall.
That, however, can amount to a 'death sentence' for used car buyers who unwittingly purchase vehicles with unrepaired recalls, while also posing a direct threat to others on the road, said Rosemary Shahan, founder of Consumers for Auto Reliability and Safety, one of the advocacy groups involved in the new legal challenge."
CARS and other leading consumer / safety organizations oppose
allowing CarMax and other car dealers to engage in
false advertising regarding the safety of "certified" used cars with
lethal safety defects as "safe," and "repaired for safety"
On behalf of a coalition of leading consumer and safety organizations, CARS filed comments, opposing the U.S. Federal Trade Commission's dangerous proposed consent orders with CarMax, Asbury Automotive Group, and West-Herr Automotive Group.
FTC would allow CarMax to advertise so-called "certified" cars with this defect, that caused Stephanie Erdmann to lose her eye, as "safe" and "repaired for safety" and passing a "rigorous inspection."
The groups warn that:
"As the FTC states, 'Unrepaired auto recalls pose a serious threat to public safety ... defects that have been the subject of recalls have led to severe injuries and even death for many consumers.' [footnote #1] We agree with the tragic truth of this statement.
Yet, despite the FTC's acknowledgment of the imminent hazards that can be posed by unrepaired recalled vehicles, the proposed agreements would allow [CarMax and the other car dealers] to advertise unsafe, unrepaired, defective recalled used cars with serious safety defects that have killed and injured people as "safe," "repaired for safety issues," or "subject to a rigorous inspection," without repairing the safety defects. They could do so if the advertising merely includes a contradictory, confusing, inadequate, and misleading disclaimer that the dealer sells cars that "MAY be subject to recalls for safety issues that have not been repaired" and the dealer subsequently provides other information that is also inadequate and much too late in the sales process to compensate for the initial false impression."
*1 Fed. Trade Comm'n, Analysis of Proposed Consent Order to Aid Public Comment, 81 Fed. Reg. 93931, 93933 (Dec. 22, 2016).
Federal Court Rules Against CarMax
over Failures to Provide Completed Inspection Reports
In a major blow to CarMax, a Federal Ninth Circuit Court ruled that CarMax fails to comply with California's Car Buyers Bill of Rights, by failing to provide completed inspection reports describing the condition of components the company inspects. CarMax sells all of its vehicles as "certified" cars that have supposedly passed a "rigorous 125+ point inspection." But the auto retailing giant neglects to name which parts passed or failed their tests.
The three-judge panel's decision was unanimous. The consumer who won the case, Travis Gonzales, bought a 2007 Infiniti G35 from CarMax in Costa Mesa, California. The car had badly worn brake pads, malfunctioning windows, a defective transmission and warning lights that lit up intermittently on the dashboard. CarMax claimed the car had passed its inspection program. The dealership argued that putting a generic list of components that were supposedly checked, in the glove box, was enough "disclosure."
The buyer's lawyer, Hallen Rosner of the law firm Rosner, Barry & Babbitt, successfully argued that CarMax's business practices are "a farce" that cheats customers.
CARS spearheaded efforts to enact and improve the Car Buyers Bill of Rights, including capping dealer interest rate markups on auto loans, mandatory disclosures of common add-on items, prohibitions against selling "certified" cars "AS IS" (without an express warranty), mandatory disclosures of credit scores to borrowers, and other protections.
NEWS FLASH: CarMax Caught on Camera Selling Unsafe Cars - AGAIN
"Used cars with open safety recalls for sale"
WCBV -TV, Boston
By Kathy Curran
December 14, 2015
"Risk of engine failure, brake failure and even fire -- all potential problems with a Jeep Grand Cherokee put on display on Boston Common by two consumer protection groups.
5 Investigates went undercover, partnering with the Massachusetts Public Interest Research Group and research analyst Sean Kane of The Safety Institute. We hit the CarMax lot in search of used cars for sale with unaddressed safety recalls and also searched the dealer's inventory online.
CarMax Caught on Camera Selling Unsafe Cars - AGAIN
We found car after car with serious safety problems and 5 Investigates' cameras watched as Kane bought that 2012 Jeep Grand Cherokee Laredo at the CarMax dealership in North Attleboro.
The car looks great and according to CarMax it passed the dealer's comprehensive quality inspection. So you would think it's safe to drive. Well, think again.
5 Investigates discovered the Jeep has some serious safety issues, so serious that the National Highway Transportation Safety Administration's website shows it has three safety recalls that have not been fixed.
'The bottom line is I've got a $29,000 vehicle that has a potential for a brake failure, the potential for the engine to shut off intermittently and the potential to catch fire,' Kane said."
Deirdre Cummings (MASSPIRG Education Fund) and Sean Kane (Safety Institute) release report with the CARS Foundation, exposing CarMax's sales of dangerous unrepaired recalled vehicles in Massachusetts Photo courtesy of Caley Mcguane
Consumers for Auto Reliability and Safety Foundation
NEWS for immediate release: December 14, 2015
Contact: Deirdre Cummings, MASSPIRG Education Fund - 617-747-4319
Rosemary Shahan, CARS Foundation – 530-759-9440
(Boston, MA) CarMax, the nation's largest retailer of used cars, is endangering lives in Massachusetts by selling recalled vehicles with potentially lethal safety defects. According to a report released today by the MASSPIRG Education Fund and the Consumers for Auto Reliability and Safety Foundation, research conducted on October 28, 2015, found that over 17 percent of cars offered for sale at the CarMax North Attleboro dealership – 42 out of 243 – were subject to a federal safety recall that had not been repaired, despite the fact that repairs for many of these safety defects were readily available – at no cost to CarMax. While some of the recalls may involve delays due to parts shortages or temporary non-availability of a remedy, CarMax could have simply waited until the repair was provided by the manufacturer before offering the cars for sale.
The vehicles were recalled due to defects including stalling in traffic; catching on fire; seat belts that may fail in a crash; Takata air bag inflators that rupture and propel metal fragments, blinding drivers or passengers or causing them to bleed to death; sticking accelerator pedals, and faulty steering that can cause a crash.
Five vehicles were subject to two or more recalls each, and 15 cars had unrepaired safety recalls where the manufacturer advised that a remedy, or repair, was “not yet available.” Consequently, purchasers who attempted to get those safety defects fixed after purchase would be unable to get them repaired until fixes were made available.
“CarMax is playing recalled car roulette with the public's safety,” said Rosemary Shahan, President of the CARS Foundation.
"Used car sales should not need a safety 'Buyer Beware' sign – the cars should be free of safety recalls before they leave the lot. I introduced the Used Car Safety Recall Repair Act to require car dealers to repair any outstanding safety recalls in used cars prior to selling or leasing them. It’s time we end the confusion of car buyers who believe they are buying a product that is safe but could end up threatening the lives of families on our Massachusetts roadways," said Senator Edward J. Markey (D-MA).
Senator Markey is championing legislation in Congress, along with Sen. Blumenthal (D-CT), to make it a violation of federal law, enforceable by the National Highway Traffic Safety Administration, for dealers to sell unrepaired recalled used cars without getting the free repairs done first.
“Consumers rightly have the expectation that when shopping at any car dealership they will be sold a safe car, and at the very least, they certainly would not expect that any car for sale would still be under a safety recall,” said Deirdre Cummings, Consumer Program Director with the MASSPIRG Education Fund.
Sean Kane, founder and president of the board of directors of The Safety Institute and a nationally known safety advocate, described his experience buying a 2012 Jeep from the CarMax store in North Attleboro on November 30. The Jeep was on display at the news conference. Kane told the salesperson that the Jeep was for his wife and his 15 year-old son Jake, who accompanied him to the dealership. The salesperson repeatedly reassured him that it was safe and that it had cleared the CarMax inspection. It wasn't until after Sean specifically requested information about recalls that they were identified – and even then the safety hazards associated with the recalls were said to be insignificant.
After Sean signed a contract purchasing the Jeep and wrote a check, and the dealership had verified that the check would clear, he was presented with a document1 to sign that said CarMax had disclosed that the NHTSA had reported that the Jeep had unrepaired safety recalls, but that AutoCheck, a vehicle history service that provides information on used cars, reported “no open recalls.”2
The Jeep purchased by Kane had three unrepaired recalls, for the following defects: 1) A brake problem that “could cause a crash without warning,” 2) intermittent stalling in traffic, which “could cause a crash without warning,” and 3) faulty wiring in the visor that may short out and cause a fire.
A vehicle history report for the Jeep provided by CarMax, from AutoCheck (owned by Experian), indicated that “your vehicle checks out” and the Jeep received green checkmarks for a long list of potential problems. There was no indication on the report that the Jeep had any safety recalls pending.
As concerning is that CarMax advertises that all the vehicles it offers for sale must pass a rigorous “125 point inspection” in order to qualify to be sold as “CarMax Quality Certified” vehicles. It also advertises a long list of specific components that are checked including brakes, engine and transmission, electrical, and steering, to name a few. Such ads are inherently deceptive when the vehicle has a safety defect that led to a safety recall, and is not repaired.
“I specifically told CarMax I wanted to buy a safe vehicle for my family, and they sold me a vehicle with three potentially lethal safety defects – sudden engine shutdown, faulty brakes and a fire hazard,” said Sean Kane.
The report found that car buyers shopping at CarMax's dealership in North Attleboro faced an even higher risk of being sold unsafe, unrepaired recalled cars with potentially lethal safety defects than used car buyers in CarMax stores in California or Connecticut, based on research in those states.
Research earlier this year by the CARS Foundation and the CALPIRG Education Fund in California found that 10 percent of vehicles at the CarMax in Oxnard and 9 percent of the vehicles at CarMax's South Sacramento dealership had unrepaired safety recalls.3 Research conducted in Connecticut found that 16 percent of CarMax cars offered for sale in East Haven and 10 percent of CarMax cars in Hartford had unrepaired safety recalls.4
The groups called on Attorney General Maura Healey to investigate CarMax's sales of unrepaired recalled vehicles in Massachusetts and take appropriate action to protect the public.
The findings are particularly troubling given CarMax’s plans to open more stores in Massachusetts, including in Norwood, Danvers and Westboro.
Consumer complaints to the National Highway Traffic Safety Administration regarding the defects in the Jeep and other models with the same defects are posted here:
The Consumers for Auto Reliability and Safety (CARS) Foundation, founded in 1982, is dedicated to preventing motor vehicle-related fatalities, injuries, and economic losses through education, outreach, aid to victims, and related activities.
The MASSPIRG Education Fund is an independent, non-partisan group that works for consumers and the public interest. Through research, public education and outreach, we serve as counterweights to the influence of powerful special interests that threaten our health, safety, or well-being.
"Consumer groups seek probe into CarMax sales
of unrepaired recalled cars"
The Los Angeles Times
June 10, 2015
By Jerry Hirsch
"Two consumer groups have asked California’s attorney general and the Department of Motor Vehicles to investigate the sales practices of used car giant CarMax.
CarMax sells unsafe recalled vehicles
The California Public Interest Research Group and the Consumers for Auto Reliability and Safety Foundation said the auto retailer regularly sells used vehicles that have been recalled but not repaired -- despite advertising that its autos undergo rigorous 'quality' inspections....
Researchers visited two of CarMax’s 18 stores in California, one in Oxnard and the other in Sacramento, and cross-checked vehicle identification numbers with a federal database that tracks whether a vehicle has been recalled and if it has been repaired.
They found that more than 10% of the 455 cars at the Oxnard CarMax had unrepaired recalls. Seven were subject to two or more recalls. In Sacramento, 9% of the 386 vehicles had unrepaired recalls.
CarMax sells unsafe recalled vehicles
The more than a dozen safety defects included: springs that can break and puncture the fuel tank, causing a fire; doors that can unlatch without warning and slide open in traffic; bolts that might break, causing an engine stall in traffic; and air bags that may fail to inflate in a crash...
The consumer groups, however, claim CarMax’s sales system might have potential violations of California regulations, including 'bait and switch' infractions, where a consumer is lured to the dealer with the promise of a car that is safe and reliable and then is switched to a defective, unsafe vehicle.
Other infractions might include false and misleading advertising and violations of vehicle code provisions that prohibit sales of vehicles that fail to comply with Federal Motor Vehicle Safety Standards, they said in their report."
"California groups say CarMax sells unsafe used vehicles"
The Sacramento Bee
June 10, 2015
by Mark Glover
"Two Sacramento advocacy groups released a report on Wednesday citing what they called CarMax’s dangerous practices and called on state officials to investigate the auto seller’s in-state operations. Specifically, the groups targeted CarMax’s 'sales of unrepaired, defective vehicles that are subject to federal safety recalls.'
CALPIRG and CARS called on Attorney General Kamala Harris and the Department of Motor Vehicles to investigate CarMax practices regarding 'advertising and sales of unrepaired recalled cars, and take all appropriate action.' 'CarMax is playing recalled car roulette with its customers’ lives and endangering the safety of others who share the roads,' said Rosemary Shahan, CARS president....
Citing information that CALPIRG obtained from the CarMax store on Stockton Boulevard, the report released Wednesday said 'approximately 9 percent of all cars recently offered for sale at that location had an unrepaired federal safety recall.' The report said 34 of 386 vehicles for sale at a local CarMax on May 26-27 were subject to safety recalls. The report listed defects including engines that could stall, possible air bag failure, worn parts, key systems failures and bad electrical connections.
At the CarMax store in Oxnard, 46 of 455 vehicles for sale on May 20-21 were subject to federal safety recalls, according to the report."
CarMax sells unsafe recalled car to young woman as her first car
KSHB-TV Kansas City
February 1, 2015
By Melissa Yeager
NHTSA's VIN lookup tool at safercar.gov
"GEORGIA - While searching for her first car, a 2014 Chevy Cruz advertised on CarMax’s website stole Chantelle Tobe’s heart....
After purchasing the car, she happily drove it around town and even took it on a road trip. Then, a month after she bought the car, her OnStar system kept alerting her there was a problem with the vehicle. It advised her to take it in to a Chevy dealer.
After inspecting the car, the Chevy dealership notified Tobe that she had been driving with a fractured right axle the entire time she owned the car. The broken axle was under a recall, one Chevy had issued before Tobe bought the car.
'It was a 2014. I assumed everything was fine because CarMax said they did an inspection,' Tobe said. Tobe said she was frightened thinking about what could have happened and angry that CarMax sold her a car with an outstanding recall."
ABC's 20/20 exposes CarMax's shady sales practices
CarMax admits it sells unsafe, recalled cars to consumers
ABC News Report: What Do Some CarMax Sales Reps Tell Consumers?
Friday, December 12, 2014
By Joseph Rhee and Gio Benitez
"CarMax says it has transformed the used car buying experience with no haggling pricing and financing and its “125+ point” inspection process to make sure drivers don’t end up with a lemon. But consumer advocates say CarMax sales reps don’t always disclose the complete history and condition of the vehicles they sell.
ABC's 20/20 finds unsafe, recalled cars for sale at CarMax
A 20/20 investigation found instances on two CarMax lots where vehicles were being sold with reportedly significant accident histories or unrepaired safety recall issues....
When it came to outstanding safety recalls, the Hartford dealership salesman was recorded on hidden camera telling Benitez that CarMax is unable to sell a car with a major safety recall. “We can’t even sell it until that’s taken care of,” he said. “We take care of any kind of safety concern prior to the car even being out here.”
However, a check of a federal government website revealed that the Toyota Camry at the Hartford CarMax dealership had three outstanding safety recalls on it at the time of our visit, including one for a power switch that could overheat and melt, possibly resulting in a fire. Five other vehicles sitting on the lot also had unfixed safety recalls, according to the government website.
CarMax declined an interview but told 20/20 in a statement that it doesn't automatically fix recall vehicles before selling them and only does so if a customer requests it. CarMax says it does inform consumers about any open recalls and recently upgraded its website so customers can look up open recalls online through the government database. CarMax also says it retrained its staff on its recall policy.
A coalition of consumer and safety groups filed a petition with the Federal Trade Commission this June, urging the agency to investigate CarMax’s safety recall policy. Rosemary Shahan, head of Consumers for Auto Reliability and Safety (CARS), is calling on the FTC to require CarMax to have all safety recall vehicles repaired before selling them to consumers. “CarMax sells vehicles that are under safety recall without bothering to fix them,” said Shahan. “If they wanted to do it right, it would be very easy for them to do it right.”
ABC 30 investigation finds dangerous
recalled cars for sale on dealer lots
Channel 30 (ABC) Fresno
November 17, 2014
by Corin Hoggard
"A record number of vehicles are getting recalled this year. Car makers have pulled about one of every five vehicles on the road, 58 million of them. But many of the potentially dangerous cars are hiding in plain sight on used car lots here in the Valley.
The truth is: they're all over the place, and you may never know it until it's too late."
CarMax -- caught on Camera AGAIN selling unsafe, recalled cars
An undercover investigation by WSB-TV in Atlanta, GA found CarMax is still selling unsafe, recalled cars -- while claiming they take care of safety recalls.
Instead of cleaning up their act, and ensuring the cars they sell are safe, CarMax says they plan to keep leaving it up to car buyers to get the safety recall repairs done -- AFTER they buy the car. For millions of recalled cars, it could take months before repair parts are available, and meanwhile CarMax customers will be stuck driving ticking time bombs.
CarMax Under Fire for Selling Recalled Cars
Call Kurtis Investigates
KOVR-TV (CBS) Channel 13, Sacramento
September 30, 2014
By Kurtis Ming
Angela Davidson says she was sold when the CarMax sales associate told her the 2010 Dodge Ram she was looking to buy passed the company's 125+ point inspection. Days later, when she called Dodge for help pairing her cellphone to the truck, she was surprised to learn it had an unfixed recall over a rear axle issue.
Protesters Urge CarMax to Stop Selling
FOX-TV Channel 40, Sacramento
September 30, 2014
By Zhoreen Adamjee
Under current federal law, it's illegal to sell new cars if they're recalled. But when it comes to used cars, it's legal.....Davidson is still frustrated that CarMax sold her a recalled vehicle. When she bought the car, she said she didn't know Chrysler had issued a safety recall on the car last year for an issue with the rear axle. She says she wouldn't have bought the car had she known. 'They led us to believe that this truck was safe, when it wasn't. They let us drive off the lot with an open recall on it,' Davidson said.
NEWS For Immediate Release: Tuesday, Sept. 30, 2014
Contact: Rosemary Shahan, Consumers for Auto Reliability and Safety – (530)-759-9440
CarMax Sales of Unsafe, Recalled Cars
Target of Protest
Family almost killed by recalled Dodge Ram, consumer and labor groups picket CarMax, Call on CarMax to Stop Selling Unsafe, Recalled Cars
Protesters picketed the CarMax store in Roseville, CA today, calling on CarMax to stop selling unsafe, recalled cars to consumers. Consumers for Auto Reliability and Safety (CARS) also released recall notices for over a dozen recalled cars and trucks CarMax is currently offering for sale in Roseville (as of Monday Sept. 29), with defects such as sticky gas pedals, faulty steering, window switches that can catch on fire, and air bags that may not inflate when needed in a crash.
Among the protesters: Angela Davidson and her daughter, Jasmine. On May 19, the CarMax store in Irvine, CA sold the Davidson family a recalled 2010 Dodge Ram. Protesters held up posters showing a photo of their truck in flames, on Highway 15, just 11 days after they bought it. The Davidsons were joined by supporters from Consumers for Auto Reliability and Safety and CourageCampaign.org.
The Davidson's truck, just 11 days after they bought it.
"CarMax sold my family a ticking time-bomb," said Angela Davidson, who recently moved with her family from Victorville, CA to Las Vegas, NV. CarMax is the nation's largest retailer of used cars, is publicly traded on Wall Street, and last year took in over $10 billion.
Because CarMax advertises that all the cars it offers for sale must meet a rigorous "125+ - point inspection," and be "CarMax Quality Certified," the Davidsons believed the truck was safe. But a few days later, when they tried to synch their Bluetooth with Chrysler's U-Connect, the manufacturer's customer service staffer broke the news that Chrysler had issued a safety recall for the truck in 2013 because the drive shaft pinion was defective, making the drive shaft prone to separating from the rear axle, without warning. The Davidsons returned to the CarMax store, thinking that CarMax would take back the truck and get the safety recall done. But CarMax refused, and told them it was their problem. The Davidsons then took the truck to a Chrysler dealer for the safety recall repairs.
On May 30, while Clarence and Angela and their 12-year-old daughter Kira were riding in the truck on Highway 15 in the Mojave Desert, they heard a loud noise and the truck became virtually impossible to steer. The truck fell apart on the freeway and caught on fire. Clarence, Angela, and Kira barely escaped alive before the truck exploded into flames. Clarence yanked Kira out of the back of the cab just seconds before the explosion. The ensuing fire consumed 3 acres and shut down the highway for 4 hours.
"CarMax is playing recalled car roulette with its customers' lives," said Rosemary Shahan, President of Consumers for Auto Reliability and Safety, a non-profit auto safety organization that is spearheading efforts to close the safety loophole that allows car dealers to sell recalled cars to used car buyers. "It would be a federal crime for CarMax to sell recalled cars like the Davidson's Dodge Ram to consumers if it were new," said Eddie Kurtz, Political Director of CourageCampaign.org.
In a similar incident that occurred last fall, David Clayton of Fresno, who bought a "certified" Dodge Ram with the same defect and safety recall from Lampe Dodge in Visalia, was nearly killed when his truck fell apart on the freeway. The drive shaft continued to spin, slamming into the gas tank The gas tank had to be replaced, but no fuel leaked out. The Davidson's truck was burned to a crisp and has not yet been inspected by an expert. So it's not clear whether the safety recall caused the incident. What is clear is that CarMax sold them an unsafe, recalled truck and 11 days later, they were nearly killed when it fell apart and caught on fire.
As recently as last Friday, CarMax was offering this 2009 Dodge Ram for sale in Roseville, despite the fact it has the exact same defect / safety recall as the Davidson's truck: 2009 Dodge Ram - rear axel defect
CARS also released ads and federal safety recall notices for other recalled vehicles CarMax is currently offering sale at their lot in Roseville, including the following:
Note: for some of the recalls, there is no remedy available yet, so consumers who purchase those vehicles will be unable to get the recall repairs, possibly for weeks or months.
According to the International Association of Machinists and Aerospace Workers, who joined in the protest, outlawing dealers like CarMax from selling recalled cars in California would create at least 1,000 good-paying jobs for automotive technicians in our state, performing safety recall repairs.
CarMax's excuse for not getting the FREE safety recall repairs done? They are not authorized by auto manufacturers to perform safety recall repairs. However, CarMax still has several options for handling safety recalls that would not place their customers' safety at risk. Among them: 1) Informing consumers who seek to trade in vehicles that their car has a pending safety recall, and they need to get it fixed before CarMax is willing to buy their car, or 2) taking the cars to properly authorized dealerships for free safety recall repairs, or 3) selling recalled vehicles to other dealers, auto auctions, or other wholesalers, instead of selling them at retail to consumers.
CARS recently spearheaded a petition to the Federal Trade Commission seeking action by the agency to curb CarMax's deceptive advertising and sales of unsafe, recalled cars to consumers.
CarMax played a major role in killing legislation in Sacramento this year that was supported by CARS, CourageCampaign.org, SAFE KIDS CA, the California Nurses Association, the International Association of Machinists and Aerospace Workers, and many other pro-safety groups, that would have made it a crime for dealers to sell unsafe, recalled cars to California consumers. The bill, SB 686, authored by Senator Hannah-Beth Jackson (D-Santa Barbara), would have allowed dealers to sell recalled vehicles to other dealers, but not to retail customers.
CarMax: Stop Selling Unsafe,
Recalled Cars to Consumers
CarMax is the largest used-car retailer in the U.S. You've probably seen their ads claiming that every car they sell passes a rigorous "125+-point inspection.” What they don't tell you is that CarMax fails to get the safety recall repairs done before they sell cars to consumers.
CarMax sells ticking timebomb cars with safety defects like: catching on fire, brake failure, exploding air bags, axles that break, ignition switches that make cars die in traffic and disable the air bags, and other life-threatening safety defects.
CarMax says they're not authorized by auto manufacturers to perform safety recall repairs. So instead of taking recalled cars to other dealers who are authorized to do the repairs, for free, CarMax dumps the unsafe cars onto their customers.
Last year, CarMax took in over $10 Billion. They can easily afford to get recalled cars repaired for free or sell them to dealers who are authorized to perform safety recall repairs. They just don't care enough about their customers' safety to do the right thing.
On May 19, Angela and Clarence Davidson bought a used 2010 Dodge Ram from CarMax in Irvine, CA. With children at home and in college, and a 5-year-old grandson, they wanted a safe car. Because the car was "CarMax Quality Certified," they believed it was safe.
But after they bought it, Chrysler told them the truck was recalled over a year ago. The drive shaft was defective and likely to separate from the rear axle. CarMax had failed to get it repaired before selling it to the Davidsons.
When they tried to return it, Carmax refused, and told them it was now their problem, not CarMax's. So they took it to a Chrysler dealer for the safety recall repairs and thought it was fixed.
But on May 30, without warning, the truck fell apart on the freeway and caught on fire. The couple and their 12-year-old daughter barely escaped before the truck exploded into flames. It also caused a brush fire that closed down the freeway for about 4 hours.
They owned their “CarMax Quality Certified” truck just 11 days. Then it almost killed them.
Consumers Have Logged More Than
1,500 CarMax complaints
FTC discloses complaints amid heightened scrutiny
of advertising practices
August 5, 2014
By Pete Bigelow
"Consumers have logged more than 1,500 complaints with the Federal Trade Commission regarding used-car seller CarMax over the past three years, according to the agency's records... During the same time period, the national branch of the Better Business Bureau, a nonprofit consumer organization, had received 802 overall complaints about CarMax; 129 of those were related to "advertising/sales."
"GREENSBORO, N.C. - If a used car dealer told you it put every vehicle through a "rigorous inspection" and "thorough reconditioning process" - would you expect the car you buy to still have problems? Problems that could lead to an engine fire or the brakes failing?
The engine fire and brake failure problems are real open recalls 2 Wants To Know found in CarMax's Triad stock. And those claims about "inspection" and "reconditioning" are from a CarMax commercial."
"11 Consumer Groups ask F.T.C. to Investigate CarMax over Unfixed Recalled Cars"
New York Times
June 24, 2014
By Christopher Jensen
"Saying that advertisements by CarMax, the nation’s largest used-car retailer, are deceptive, a coalition of 11 consumer groups has asked the Federal Trade Commission to investigate.
Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, said the groups would like the F.T.C. to stop CarMax from selling used vehicles without fixing recalls. “They are trying to say they are not responsible for making sure the recall work is done at the time you buy the car,” she said.
The CarMax-related petition being sent to the F.T.C. also has the support of Senator Charles E. Schumer, Democrat of New York. “It is bad enough that used-car dealers are not required by [a specific federal] law to fix a safety recall problem prior to selling the recalled vehicle to a consumer,” Senator Schumer wrote in a supporting letter sent to the F.T.C. on Monday. “Compounding the safety risks with misleading and deceptive advertising and sales practices only further endangers the safety of used-car customers and everyone who shares the roads,” he wrote.
The lack of a [specific federal] law requiring recall repairs to be performed on used vehicles surprised Angela Davidson, who bought a 2010 Ram 1500 pickup from a CarMax dealer in Irvine, Calif., last month. She contacted Chrysler to see about using Bluetooth to connect her cellphone. After providing the vehicle identification number, she was told that her Ram had been recalled in February 2013 because the rear axle might seize up. Chrysler had told federal safety regulators that such a development could “cause a loss of vehicle control and/or a vehicle crash with little warning.”
“If I had known that there was an open recall like that there is no way on this Earth that I would have driven off with that truck,” she said."
Petition Seeks to Block CarMax Sales of Unrepaired Recalled Cars
Los Angeles Times
June 24, 2014
By Jerry Hirsch
“CarMax is playing recalled-used-car roulette with its customers' lives,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento consumer advocacy nonprofit that spearheaded the petition.
.... attorneys for CarMax said it was impractical for the used car seller to manage the repairs, with the company having to devote staff time to taking a recalled car to the nearest dealer of that make for the repairs. The manufacturer, not CarMax, would still pay for all recall repairs."
Consumer Groups Target CarMax over
handling of recalls
June 26, 2014
by Mitch Lipka
"A coalition of 11 consumer groups this week petitioned the Federal Trade Commission to take action against CarMax (KMX), the nation's biggest seller of used cars, taking issue with its promise that all vehicles it sells are inspected for safety even though the company doesn't fix recalls."
Safety Groups Urge FTC to Halt CarMax Advertising
over Unrepaired Recalled Vehicles
June 24, 2014
By David Shephardson
"Washington— A dozen auto safety and consumer groups asked the Federal Trade Commission to stop the nation’s largest used-car seller, CarMax Inc., from advertising its vehicles as rigorously inspected when it fails to complete recall repairs before selling the vehicles.
At issue in the FTC petition is the company’s advertising as “CarMax Quality Certified” with a rigorous “125+ point inspection.” The four-page petition calls it “inherently deceptive” to tell customers that vehicles have passed a rigorous safety inspection, “while failing to take even the most basic step of checking the vehicle’s safety recall status.”
CarMax Should Be More Transparent About Selling Recalled Vehicles
June 24, 2014
by Chris Morran
"When CarMax, the nation’s largest seller of used vehicles, claims each of its “Quality Certified” cars has undergone a “125+ point inspection,” and that only 1-in-3 of the cars it considers is accepted for sale, you might assume this means it isn’t selling recalled vehicles. This is not always true, and a coalition of consumer advocacy groups allege that it’s a case of deceptive marketing....
We reached out to CarMax for a comment on the petition.The company explained that it doesn’t do recall repairs because 'New car manufacturers do not give used car retailers, including CarMax, the authority to complete recall repairs.' However, that doesn’t explain why CarMax wouldn’t just take a recalled vehicle to a dealership and get the necessary repairs done, as it would be free of charge."
"Consumer and safety groups are urging the Federal Trade Commission to investigate their allegations that used-vehicle retailer CarMax Inc. is failing to check the safety-recall status of the vehicles it sells."
"CarMax is playing recalled used-car roulette with its customers' lives," said Rosemary Shahan, president of Consumers for Auto...
With all the outrage about ignition problems in GM vehicles, you'd think that the last thing a dealer would want is a recalled, un-repaired car. But think again. Used car dealers and rental car agencies are not required by [a specific, federal] law to fix vehicles that have been recalled for safety reasons....
YOUNG: And we have been following this story in amazement. Do you find people shocked by this?
EISENSTEIN: I think they are shocked. If they knew about this problem they would be even more shocked. I think a lot of people just expect that when they buy a car or rent a car, that it is as safe as possible. Meaning if there's been a recall it's been repaired.
YOUNG: Well, in fact, we are reading in The New York Times today, which writes about this, that CarMax -- which is the country's biggest seller of used cars -- does have a certified quality inspection. But that doesn't include fixing recalls....
EISENSTEIN: It's really curious isn't it? Because when you look at NADA, National Automobile Dealers Association website, you'll find a statement from them that essentially says they support a law that would call for the recall and repair of vehicles before they were sold by, on the used car site. And yet, NADA has been fighting the bill, so it's both sides of the mouth.
They have all sorts of explanations for this, none of which are particularly good. Some of them say, Well, sometimes they say the law isn't written well and what have you.
And then they claim, well, it would be an extra burden for them when that corner used car lot and the like, they don't have to be subject to these mandatory recalls.
YOUNG: Well, but there - but...
EISENSTEIN: It seems to be a pretty weak, weak explanation."
NEVER trust that a dealer will have the safety recall repairs performed before selling you a car that is being recalled. Dealers are so eager to make a buck, fast, they are unwilling to delay sales long enough to get the safety recall repairs done -- for FREE.
Plus -- dealers are actively opposing legislation in Washington, DC and in California that would prohibit them from renting, selling, leasing, or loaning unsafe, recalled vehicles to consumers, unless the safety recall repairs have been performed first.
CARS' tips on how to buy a safe, reliable used car — without having to risk going to a dealer:
Did a dealer sell you an unsafe, recalled car? We want to hear your story. Contact CARS
Buyer Beware! Auto dealers' one-
sided contracts can ruin your life
Even if the car dealer breaks the law, you might not be able to get justice. Forced arbitration clauses hidden in the fine print can keep you tied up for years. The dealer often gets to pick the arbitrator who hears your case. CARS exposed how a dealer abused arbitration, after selling Jon Perz an unsafe car. CARS' video has received over 1.3 million views on YouTube. Jon and his attorney eventually won, but because of forced arbitration, Jon had to wait 8 years for justice:
Think this is outrageous? Call your member of Congress at 202-224-3121, and urge them
to vote for the Arbitration Fairness Act. More about the AFA, now pending before Congress: http://www.fairarbitrationnow.org
Here's what we're doing to bring
more attention to Jon's plight: