FTC Approves Settlements With CarMax, Asbury, West-Herr
The Federal Trade Commission last week approved settlements with CarMax, Asbury Automotive, and West-Herr Automotive Group, which the regulator charged with failing to disclose that some pre-owned vehicles offered for sale had unrepaired safety recalls despite the companies' claims of rigorous vehicle inspections.
WASHINGTON, D.C. — The Federal Trade Commission last week approved settlements with CarMax, Asbury Automotive, and West-Herr Automotive Group, which the regulator charged with failing to disclose that some pre-owned vehicles offered for sale had unrepaired safety recalls despite the companies' claims of rigorous vehicle inspections.
The final orders prohibit CarMax, Asbury, and West-Herr from claiming that their used vehicles are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless they are free of open recalls or the companies clearly and conspicuously disclose their vehicles may be subject to unrepaired recalls for safety issues. They must also explain to consumers how they can determine a vehicle’s recall status. The orders also prohibit the organizations from misrepresenting material facts about the safety or recall status of used cars they advertise.
Additionally, the orders require the three companies inform recent customers, by mail, that vehicles they bought as far back as July 1, 2013, may be subject to open recalls.
“Federal law requires that all new cars sold in the United States be free from recalls, but it does not prohibit auto dealers from selling used cars w3iht open recalls. As a result, neither the [National Highway Transportations Safety Administration (NHTA)] nor any other agency has the authority to ban the sale of used cars that have open recalls across the industry,” the FTC said in December when the settlements were first announced. “Section 5 of the [FTC Act], however, enable the commission to stop car sellers from engaging in false or misleading practices that maske the existence of open recalls, and we are committed to doing just that.”
The FTC’s complaint against Virginia-based CarMax revolves around the retailer’s advertising claims of a “125+ Point Inspection,” and that its cars undergo, on average, “12 hours of renewing — sandwiched between to meticulous inspections.” The complaint also notes a TV commercial touting a team of inspection and reconditioning, which includes a message that appears for three seconds in tiny type at the bottom of the screen that reads, “Some CarMax vehicles are subject to open safety recalls.”
Those recalls, however, included the GM’s key ignition switch defect, as well as the Takata airbag defect, the agency alleged.
As for Georgia-based Asbury Automotive Group, which also does business as Coggin Automotive Group and Crown Automotive Group, the FTC alleged in its complaint that the company made claims such as: “Every Coggin Certified used car or truck has undergone a 150-point bumper-to-bumper inspection by certified mechanics. We find and fix problems — from bulbs to brakes — before offering a vehicle for sale.”
Like it did in its complaint against CarMax, the FTC charged the group with failing to adequately disclose in its advertising that some vehicles were subject to open recalls, including one that could cause fuel to leak and the engine to misfire or stall, as well as one that could cause a car to move in an unexpected or unintended direction.
In its complaint against West-Herr Automotive Group, the largest auto group in New York, the FTC cites claims about vehicles backed by the “West-Herr Guarantee” and touting a “rigorous multipoint inspection with our factory trained technicians.” However, the FTC’s complaint alleges that the company failed to properly disclose that some of the vehicles were subject to recalls for defects that could result in serious injury.
The commission vote approving the final orders against CarMax, Asbury and West-Herr GM was 2-0.
More Auto Finance

Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Auto Lenders, Consumers on a Tightrope
April borrowing data shows that more consumers are bending over backward to buy vehicles, though subprime lending cooled off for the month.
Read More →
Toyota Financial Services President Replaced
Scott Cooke has served in various roles with Toyota Financial Services for over 20 years, including president and CEO, which he retires from on June 30.
Read More →
Permission or Approval: When to Notify Finance Sources
Credit card down payments, multiple vehicle purchases and even straw purchases can be completed without committing bank fraud, as long as you tell the bank first.
Read More →
At-Risk Auto Borrowers Drive Looser Credit Access
Cox Automotive’s index shows the subprime segment, long loan terms, negative-equity borrowers and down payment amounts all grew in February despite ever-higher vehicle prices.
Read More →
Auto Loan Forecast Bucks Market Trend
Auto loan originations rose over 6% year-over-year in the third quarter of 2025, but TransUnion predicts a slight decline in auto loan growth this year, making it an outlier in the company's overall lending forecast.
Read More →
Auto Credit More Plentiful
Growing access shows greater lender appetite for risk as consumers take on heavier debt burden in an inflated market.
Read More →
Auto Loans Long as Stretch Limos
More consumers, faced with ever-rising car prices, are adapting by agreeing to longer loan terms despite the cost of added interest payments.
Read More →
AutoPayPlus Launches RePayPlus
The reinsured biweekly payment program offers auto dealers with customer retention and reinsurance structure.
Read More →