- As part of the settlement, CarMax will pay at least $420,000 in damages to servicemembers and a civil penalty of $79,380 to the United States, the department said.
- The company will further revise its policies and procedures pertaining to the allegations, the department said.
- In the Q3 fiscal year 2026, the company announced that its retail used unit sales fell 8% and comparable store used unit sales declined 9%.
Shares of CarMax Inc. (KMX) slumped 5% on Monday after the U.S. Department of Justice announced that it has reached a settlement with the user car retailer.
The DOJ said that the settlement seeks to resolve allegations that CarMax illegally repossessed motor vehicles owned by members of the military without obtaining court orders.
A federal law prevents an auto finance or leasing company from repossessing a servicemember’s vehicle without first obtaining a court order, as long as the servicemember made at least one payment on the vehicle before entering military service.
As part of the settlement, CarMax will pay at least $420,000 in damages to servicemembers and a civil penalty of $79,380 to the United States, the department said. The company will further revise its policies and procedures pertaining to the allegations, the department added.
Tough Q3, New CEO
CarMax has over 250 stores in 41 states, and has sold over 13 million cars and bought 15 million, as per the company’s website. In the third-quarter (Q3) of fiscal year 2026 ended November, the company announced that its retail used unit sales fell 8% and comparable store used unit sales declined 9%. Net earnings fell to $0.43 per share in the quarter, compared to $0.81 a year ago.
Earlier this month, CarMax also appointed Keith Barr, former CEO of InterContinental Hotels Group as President and CEO, effective March 16. Interim CEO David McCreight will transition to his prior duties as an independent Director of the Board, the company said at the time.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around KMX stock stayed within the ‘bearish’ territory while message volume remained at ‘high’ levels.
KMX stock has dropped 49% over the past 12 months.
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