Goochland-based CarMax Settles DOJ Case Over Illegal Servicemembers' Repossessions

The U.S. Department of Justice reached a settlement with Goochland-based CarMax Auto Finance after alleging the company illegally repossessed motor vehicles owned by active-duty servicemembers in violation of the Servicemembers Civil Relief Act. Stocktwits reported the agreement requires CarMax to pay at least $420,000 in damages to servicemembers and a $79,380 civil penalty to the United States.

Under the terms described by MilitaryTimes and NavyTimes, CarMax must revise its repossession policies and procedures, send a written notice to each affected servicemember within 30 days, and establish multiple cost-free contact methods including an email address, a website, and a toll-free phone number for affected accounts. The settlement also requires CarMax to request that the major credit bureaus remove negative information tied to affected accounts.

Assistant Attorney General Harmeet Dhillon of the Justice Department’s Civil Rights Division framed the enforcement action as protecting military rights, saying, “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.”

CarMax officials provided a statement to MilitaryTimes and NavyTimes saying, “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 resolution between the DOJ and CarMax Auto Finance does not constitute an admission of wrongdoing by CarMax Auto Finance.” Those outlets also report that CarMax said it has enhanced processes for complying with the SCRA, expanded proactive screening and outreach, and reinforced employee training.

Company background cited by Stocktwits notes CarMax operates more than 250 stores in 41 states and has sold over 13 million cars and bought 15 million cars. Stocktwits further reported a 5% slide in CarMax shares on Monday following the DOJ announcement and cited Q3 fiscal 2026 results showing retail used unit sales down 8%, comparable store used unit sales down 9%, and net earnings of $0.43 per share versus $0.81 a year earlier. Stocktwits also noted an executive change, naming Keith Barr as president and CEO effective March 16 with interim CEO David McCreight returning to the board.

The CarMax settlement joins other recent enforcement actions involving troops and auto finance. MilitaryTimes and NavyTimes flagged a Hyundai financing subsidiary settlement of $333,941 and a separate “Troops to receive $3.5 million” item listed as related context; those matters were presented by the outlets as distinct from the CarMax action.

Separately, CarMax Auto Superstores California, LLC agreed to a $1.6 million environmental settlement with the San Diego County District Attorney’s Office and 16 other California district attorneys over alleged improper disposal of hazardous auto body materials from 2014 to 2020. Neuralit and Danewscenter reported the June 16 settlement included $1,000,000 in civil penalties, $300,000 for investigative costs, and $300,000 for supplemental environmental projects. San Diego County District Attorney Summer Stephan said, “This settlement holds CarMax accountable for violating laws that are in place to protect the environment,” and added, “These types of investigations and settlements are a reminder to corporations that they have a responsibility to be a good steward to our environment or face consequences.”

Affected servicemembers should expect a formal letter within 30 days and new cost-free contact channels from CarMax Auto Finance as the company implements the compliance changes required by the settlement. The Justice Department said it will continue to enforce SCRA protections for military personnel.