By on October 24, 2016

CarMax in Raleigh, Image: Ildar Sagdejev [GFDL or CC BY-SA 4.0-3.0-2.5-2.0-1.0]/Wikimedia Commons

When is a completed inspection report not a completed inspection report? When it’s issued by CarMax, a California appeals court has ruled.

The court found the country’s largest used vehicle retailer in violation of a state law requiring detailed inspection checklists for certified used vehicles, Automotive News reports. The ruling, which stems from a lawsuit filed by a customer who claimed CarMax sold him a “certified” lemon, shines light on the retailer’s dodgy vehicle inspection practices.

According to the U.S. Court of Appeals for the 9th Circuit, CarMax failed to detail to customers the condition of various components inspected through its certified used vehicle program. Under the state’s Car Buyer’s Bill of Rights, passed in 2006, a certified used car seller must provide a detailed checklist.

Travis Z. Gonzales, who bought a 2007 Infiniti G35 from a Costa Mesa, California CarMax, knows this now. He filed his lawsuit after finding badly worn brake pads, malfunctioning windows, a wonky transmission and warning lights that lit up his instrument panel like a Christmas tree. This, despite CarMax’s 125-point inspection program.

The buyer’s lawyer, Hallen Rosner of the law firm Rosner, Barry & Babbitt, claims the program is “a farce” that cheats customers.

When he bought the car, Gonzalas received two versions of CarMax Quality Inspected Certificates inside the vehicle. Those documents list the inspected components. The law requires that customers receive a third document — a detailed inspection checklist filled out by a technician that lists the condition of each part. Gonzales wasn’t handed a copy of this document. Court documents state that CarMax instead destroys the checklist after entering the inspection results into a database, leaving the customer in the dark.

In the court’s decision, Circuit Judge Stephen Reinhardt wrote, “Sellers cannot merely list components that have been inspected, thereby leaving the consumer ignorant as to whether the various components satisfactorily passed the inspection.”

He added, “CarMax’s CQI certificates merely guarantee that the vehicle’s overall condition satisfied its certification program and list the components inspected under that program. After receiving this certificate, the consumer knows neither the condition of the individual components nor which, or how many, components must pass the test before a vehicle is ‘certified.’”

In a statement, CarMax said, “We respect the court’s findings and are reviewing the ruling to determine if any changes need to be made to our process.”

Given the court’s ruling, it’s almost guaranteed that CarMax customers will soon see the technician’s report. Possible changes to the retailer’s certification process can’t be ruled out.

[Image: Ildar Sagdejev/Wikimedia Commons (CC BY-SA 2.0)]

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19 Comments on “CA Court Rules CarMax Inspection Checklist Isn’t What You Think It Is...”


  • avatar
    wintermutt

    lots of experience with Carmax here. bought two cars from, sold them one vehicle. Carmax used to be a good place to buy a used car. no longer for me …
    their inspections are actually much worse than what you read here. example – i bought a used 5 series wagon from Roseville Carmax about 2 years ago. passed “inspection” by Carmax . anyway i did my due diligence and took the vehicle to my local independent repair shop for inspection. shop calls me almost immediately, tells me to return vehicle, it has an obvious mud/water line high up in the engine compartment (in other words – previous flood damage). car was sold at auction, picked up by another Carmax dealer, then transferred to Roseville. anyway, i took the 5 series wagon back to Roseville Carmax, they refunded my money. i showed them in writing my mechanic’s report of the mud/water line in the engine compartment. SHORTLY AFTERWARDS THEY PUT THE SAME VEHICLE ON THE ROSEVILLE CARMAX LOT TO BE SOLD TO THE NEXT SUCKER. no mention of mud/water intrusion in online description.
    YMMV – i may never go back. personally, i think Carmax got too big. they used to have their pick of nice used vehicles – now they buy them at auction. their warranty is not as good as it was either.

    • 0 avatar
      duffman13

      Thankfully they have the 5-day return policy. Had you bought from almost any other dealer you would have been SOL. Let it be a lesson, PPI means *PRE*-purchase inspection, not post.

  • avatar
    mikey

    We don’t have Carmax in Canada. We do have, however, probably one of the most stringent “safety check” rules, at transfer of ownership. We also don’t have any mandatory annual , or semi annual safety check requirements . The new laws went into effect July 1 2016.

    The effects ? The non franchised places , either closed up, or raised their prices. The franchise places only keep the cream of the crop. The private seller, has to consider the cost, of meeting the requirements, or sell “as is”. Buying an “as is “vehicle is a huge gamble. If it turns out to be cost prohibitive to safety check, its food for the crusher.

    The independent repair shops, are reaping the benefits. Folks on the lower end of the socio economic spectrum, are pumping money into their old beaters. I guess $2000 a year in repairs, is an alternative to the minimum $10,000 for a decent used car.

    • 0 avatar
      gtemnykh

      “The private seller, has to consider the cost, of meeting the requirements, or sell “as is”. Buying an “as is “vehicle is a huge gamble.”

      *Shrug*

      I buy and sell all my cars “as is” on craigslist. Buyer beware and all that. The maxima I bought earlier this year with the intent of using as a winter beater turned out to have some worrying rust in a non-visible place that I forgot to check when buying (I knew of this phenomenon, just slipped my mind). I fixed it up a bit, polished it up, and sold it for enough to recoup my costs, again, as is. Bought my ES300 the same exact way, thankfully this one turned out to be a winner, albeit of course a few things need to be addressed but nothing that I didn’t know about before handing over the cash.

    • 0 avatar
      duffman13

      In the US it is state to state. In my experience Maryland has one of the most stringent safety checks to transfer title, and almost any used vehicle you can buy in the state from a dealer is in decent working order. Virginia has a moderate annual inspection, but it really only checks if your lights work and your tires aren’t bald.

      Having lived in Florida, I know there are alot of states have basically no rules too. If you live somewhere like there or Michigan you’d be surprised about the crap heaps that dealers will move.

      • 0 avatar
        Vulpine

        You want picky, try Pennsylvania. You think Maryland is strict then try transferring title there. I’ve done it twice (sold older cars to Pennsy residents) and split the cost of any repairs with the buyer in good faith.

  • avatar
    SCE to AUX

    We’ve discussed this before, but I’d lump Carfax into this mess.

    The Leaf I traded after a $4000 collision repair at Nissan’s chosen 3rd-party shop was later resold with a clean Carfax. I alerted the resale dealer to this discrepancy (for my own amusement, really), and received no reply. The repair was *ok*, but afterward the frame/suspension squeaked a bit and the charging door didn’t open as readily as before. Someone bought a car that wasn’t quite OEM.

    As usual, buyer beware.

  • avatar
    Land Ark

    I never gave Carmax any credit for their inspections. They have too many cars coming and going to stop the line and actually check all their cars. It’s impossible.
    For example, I (briefly) bought a 2006 GTO with 7,000 miles on it back in 2012. I had done a lot of homework and knew the common problems they had, even on one with such low miles. I test drove it for the ridiculously short loop they let you take and in that 3.5 miles, I could tell immediately that the front shock was blown. Anyone who had even driven it off the transporter should have noticed that.
    What I DO give them credit for is that if you buy something and there is something wrong, they won’t hassle you about it, they’ll fix it. I agreed to buy it with the stipulation that they fix it, which they agreed to immediately.
    I ended up backing out within their 3 day return policy and I never actually picked it up. And that was also really easy.
    I may not like their prices and they will really try to screw you with the interest rates they offer, but the no pressure and no dumb game method of selling is a nice change of pace. But you still have to do your homework.

    • 0 avatar
      Vulpine

      Fortunately where I live, any car that transfers ownerships after the original sale MUST go through a State inspection process that is likely significantly more extensive than Carmax’s. It does help to eliminate the chaff when someone tries to sell you a rolling wreck as a CPO.

    • 0 avatar
      MBella

      I don’t understand the no game and no pressure method, and why people think it’s good. You are welcome to go to any car dealer and pay the asking price and leave with the car. At Carfax you just loose the ability to negotiate down to a reasonable level.

  • avatar
    RHD

    This is like the “dietary supplements” that are “clinically proven to” enhance or support something or other, and, of course, do nothing but empty your wallet.

    “Certified Used Car” to anyone who is sufficiently skeptical for modern life simply means that you can be very sure that it is actually a used car.

  • avatar
    quaquaqua

    Carmax doesn’t do crap to recondition their cars. Their lots are flooded with ex-rentals, the most abused cars on the planet. I will say it’s a great place to SELL your car, though. My family has sold three cars so far and gotten far more than KBB would indicate. This kinda makes sense, as their used cars are typically totally ripoffs.

    Example: My dad sold his 2007 Civic to Carmax (with low miles, like 60k) in 2015. Local dealers offered him around $5000 tops. Carmax offered us $7000. He sold it to them quickly and painlessly. Two days later the car was on sale on a local Carmax lot for $12000. It was sold within days. Who would spend $12k on an 8 year old Civic (which cost my dad $16,700 after negotiation), ya got me. But clearly people trust Carmax. And at least in our case, they didn’t get a 2 year old rental with 50k on it. But they still got screwed.

  • avatar
    KevinC

    Don’t forget – Carmax was brought to us by the fine folks who ran Circuit City. Nothing surprising here.

  • avatar
    joeveto3

    I have a couple thoughts on this and CarMax in general:

    I’m not surprised they got caught with substandard car inspections. This happens everywhere, is the rule more than the exception, but not just with CarMax. In fact, I’d argue it happens less often at CarMax. I would bet the issue is more dependent on local store management, technician workload, oversight, etc.

    In my own personal experience, I’ve seen a wide variance in car quality even on the same CarMax lot. In other words, they are not all of the same high “CarMax” standard, and cars that may look good online, are questionable in person. That being said, I think CarMax is still better than most dealers when it comes to actually inspecting and reconditioning their vehicles.

    I spend a tremendous amount of time searching CarMax’s website. I love their selection of cars, and I really like the consistency of their listings, especially when it comes to powertrains and options. Try to search for a manual transmission at any non-CarMax dealer, and you’ll see as many automatics as you will honest-to-three-pedal manual transmissions. If it’s an automatic with paddles, a large portion of dealers will list it as a manual. CarMax takes the listings seriously, and 99% of the time, if they say the car is a manual, it’s a manual.

    The same is true for features. If you want to find a particular car, say a Mustang with the astro roof, they’ll list it correctly. I don’t know of any other outlet that is so consistently particular and correct when it comes to these details.

    And they always have a lot of high resolution photos to really show you the car.

    Alas, I’ve never purchased from CarMax, for the simple reason they are as much as 20% more costly than other dealers. And their no-haggle philosophy underscores just what a bad deal they are.

    The final nail in the coffin, for me, is the test drives are so short. I’ve only gone on one CarMax test drive, it was down the block and back, as if to prevent me from really seeing whether or not the car was fit. That doesn’t fly with me. I need to spend time with a car before I can decide if I want to buy it. CarMax makes this too difficult.

    But I still shop their website…

    • 0 avatar
      threeer

      I made friends with a CarMax dealer (who unfortunately later moved out of state) who would call me when anything tasty would arrive (Mr. K, we have a nice manual 3-series/Corvette/Mustang/etc…here today. Want to come down and take it out?). We developed a really nice backroad test loop that allowed me to hit triple digits on a long straight away and tossed in several nice curves. Definitely more than 3.5 miles.

      But yes, the sales prices is usually high, especially for older model vehicles. I don’t understand how they sell them at those prices. Some of the newer model cars are sometimes priced reasonably well, but it’s those older ones that get me. I did buy my manual trans 2006 Ford Fusion from them and actually got them to reduce the price when I pointed out that they had advertised it incorrectly. I go there now to basically try on numerous cars to help me make decisions, but haven’t bought from them in years.

    • 0 avatar
      wintermutt

      Roseville Carmax (California) nice long test drives, street and freeway.
      low pressure by salespeople. the concept of a vehicle that has been inspected, is not bought at auction, available long warranty, fixed price is a good one. and it WAS a good one, but Carmax changed. they shortened the long warranty, the inspections are no longer done by technicians, and the cars are bought by Carmax at auction. Carmax as it was no longer exists.

  • avatar
    slavuta

    Seriously. I just read CarMax as CarlMarx

  • avatar
    Jimal

    I bought a Dakota quad cab from my local CarMax years ago. The price wasn’t terrible but ultimately the truck was. They replaced the pulsating front brakes under warranty only to have them start pulsating again within a couple thousand miles. Between that and the motorboat like ride (and the last of parts support for the truck at the time) and it was soon traded in on a Passat wagon for the wife.


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