U.S.
CarMax to pay $500K to settle illegal repossession claims involving military members
Stars and Stripes
February 24, 2026
The Department of Justice seal is seen in Washington, D.C., on Nov. 28, 2018. (Mandel Ngan/AFP/Getty Images via TNS)
CarMax Inc., the nation’s largest used-car retailer, will pay at least $420,000 to service members to settle allegations that it illegally repossessed vehicles owned by them, the U.S. Department of Justice announced Monday.
Federal officials said the settlement resolves claims that the company violated the Servicemembers Civil Relief Act, which prohibits auto finance or leasing companies from repossessing active-duty service members’ vehicles without a court order, as long as the service member made at least one payment on the vehicle before entering service, according to the Justice Department.
For members of a reserve component, those protections begin on the date they receive orders to military service. The Justice Department alleged that CarMax failed to extend SCRA protections to reservists who had received orders to report for active duty.
In an emailed statement Tuesday, CarMax noted the settlement does not constitute an admission of wrongdoing, adding that “supporting our nation’s military is rooted in CarMax’s culture.”
“CarMax Auto Finance has cooperated fully with the DOJ to reach a resolution to the allegations and has further strengthened our existing compliance program,” the company said.
In addition to compensating affected military members, CarMax will pay a $79,380 civil penalty to the United States and revise its policies and procedures to ensure that the rights of U.S. service members are protected in the future.
“The Department of Justice is proud to defend the rights of those who serve in our military and will continue to vigorously enforce the laws that protect them,” said Assistant Attorney Gen. Harmeet K. Dhillon of the Justice Department’s Civil Rights Division, in a news release.
Service members or their families who think their rights under the SCRA were violated can contact their nearest Armed Forces Legal Assistance Program office for help. A list of office locations is available at legalassistance.law.af.mil.