Some companies think soldiers deployed overseas won't fight back.
CarMax just found out what happens when the Trump Justice Department decides to prove them wrong.
And the nation's largest used car retailer is now writing checks to 28 military families – and what CarMax did to trigger this reckoning will make your blood boil.
CarMax's Illegal Repossessions of Active Duty Service Members
Congress passed the Servicemembers Civil Relief Act for one reason: no lender can take a soldier's vehicle without a court order while that soldier is serving.
CarMax didn't bother.
Between March 2018 and October 2023, the company's finance division seized vehicles from at least 28 service members who were either on active duty or had already received orders to report.
In some cases, CarMax repossessed the vehicles after the service members told them directly they were in the military.
A corporation decided federal law protecting deployed troops was optional.
CarMax also stripped protections from reservists who had received orders but hadn't yet physically reported for duty – which tells you exactly how little the company cared about getting this right.
The DOJ's settlement agreement reveals how CarMax's own internal policies made these violations inevitable: the company didn't require its finance staff to check the Department of Defense database before repossessing a vehicle flagged for charge-off status.
No search required. No military check. Just take the car.
How the DOJ Settlement Forces CarMax to Pay Military Families
Trump's Justice Department didn't look away.
Assistant Attorney General Harmeet Dhillon, leading the DOJ's Civil Rights Division, announced the settlement and made the message plain.
"Federal law prohibits businesses from repossessing service members' vehicles without a court order," Dhillon said. "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."
Under the consent agreement, CarMax will pay at least $420,000 in damages – a minimum of $15,000 per affected service member, plus any lost vehicle equity.
The company also pays a $79,380 civil penalty directly to the U.S. government.
CarMax must notify each affected service member within 30 days, wipe the illegal repossessions from their credit reports, and submit revised policies to the DOJ for review.
The consent agreement runs four years.
A Pattern of SCRA Violations Against Troops — And $484 Million in Settlements
CarMax isn't some rogue bad actor in an otherwise clean industry.
Santander paid more than $10.5 million in 2015. GM Financial paid over $3.5 million to resolve allegations involving 71 illegal repossessions. New City Funding Corp. settled in 2023.
Since 2011, the DOJ has recovered more than $484 million for over 149,000 service members through SCRA enforcement alone.
One hundred and forty-nine thousand American troops had their legal rights violated by companies they trusted to follow the law.
It kept happening – year after year – because the financial penalty was cheaper than the compliance investment.
Companies ran the numbers, decided the fines were manageable, and kept repossessing cars. The troops paid the price.
That calculation changes under Dhillon.
What the CarMax Case Means for Military Car Loans Going Forward
What CarMax did isn't complicated.
A soldier gets deployment orders.
He's still paying his car note. Federal law says the car cannot be touched without a judge's approval – because Americans who answer their country's call shouldn't lose everything they own while they're gone.
A soldier downrange has one job: come home alive.
He shouldn't have to wonder whether his car is sitting in his driveway or in a CarMax auction lot because some finance department skipped a database search.
Some of these soldiers didn't just come home to an empty driveway.
They came home to a wrecked credit report too – because CarMax didn't just take the vehicle, it reported the repossession to the credit bureaus. The settlement requires CarMax to scrub every one of those records.
CarMax took the car while he was overseas – while he was focused on staying alive – and released a statement calling it a "commitment to continuous improvement and supporting those who serve."
Harmeet Dhillon just made clear that kind of corporate math doesn't work anymore.
Sources:
- Karen Jowers, "CarMax to pay at least $420K to settle allegations of illegal repossessions of troops' cars," Military Times, Feb. 23, 2026.
- "CarMax to pay $420K to resolve DOJ allegations over servicemember vehicle repossessions," Fox Business, Feb. 23, 2026.
- "CarMax to Pay Nearly $500,000 to Remedy Illegal Repossessions of U.S. Servicemembers' Vehicles," U.S. Department of Justice, Feb. 23, 2026.
- "GM Financial to Pay Over $3.5 Million to Resolve Servicemembers Civil Relief Act Claims," U.S. Department of Justice, Feb. 6, 2025.
- "DOJ Settles with Auto Finance Company Accused of Illegally Repossessing Servicemembers' Vehicles," Hudson Cook LLP (New City Funding Corp. case), Sept. 29, 2023.
- "DOJ enters into settlement with credit union to resolve alleged SCRA violations," Consumer Finance Monitor (BayPort), March 23, 2022.
