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What Do Some CarMax Sales Reps Tell Consumers About Vehicles?

iStock/Thinkstock(NEW YORK) -- CarMax says it has transformed the used car buying experience with no haggling pricing and financing and its “125+ point” inspection process to make sure drivers don’t end up with a lemon. But consumer advocates say CarMax sales reps don’t always disclose the complete history and condition of the vehicles they sell.

A 20/20 investigation found instances on two CarMax lots where vehicles were being sold with reportedly significant accident histories or unrepaired safety recall issues.

20/20 correspondent Gio Benitez went on an undercover shopping trip at a CarMax dealership in Hartford, Connecticut. There, Benitez inquired about a MINI Cooper in the showroom that had a positive report on AutoCheck, the vehicle history report service that CarMax uses.

“Here we have one owner vehicle, no accidents. Even if it did have an accident, which it does not, we guarantee there is no frame damage on that vehicle or any vehicle we sell,” said a Hartford CarMax salesman, who was recorded on a 20/20 hidden camera.

But a search of the MINI Cooper’s history on a different database, Carfax, showed that the car was involved in an accident and there was structural damage that had to be repaired earlier this year. Experts say a serious accident can cause a vehicle’s resale value to plummet.

CarMax told 20/20 the salesman didn't misrepresent the condition of the car, and that it met CarMax’s quality standards when it was sold. CarMax says they had the MINI Cooper re-inspected and found it had no outstanding structural problems.

At another CarMax lot in East Haven, Connecticut, a salesman ran an AutoCheck search on a Honda CR-Z, and it came up as having no accidents.

“There’s no air bags that went off. Let’s say the airbag went off in this car, right? And they had to replace them? They’d have to mark the car as salvaged,” said an East Haven CarMax salesman, who was recorded on a 20/20 hidden camera.

However, a replaced airbag doesn’t necessarily mean a vehicle is salvaged, and a search on Carfax revealed that the Honda’s airbag had gone off after an accident. According to the Carfax report, the vehicle had to be towed from the scene.

In response, CarMax said AutoCheck is a leading vehicle history search service, but no accident database is complete. CarMax says it trains its sales staff to explain that to customers, but both the Hartford and the East Haven salesman never made the disclosure.

When it came to outstanding safety recalls, the Hartford dealership salesman was recorded on hidden camera telling Benitez that CarMax is unable to sell a car with a major safety recall.

“We can’t even sell it until that’s taken care of,” he said. “We take care of any kind of safety concern prior to the car even being out here.”

However, a check of a federal government website revealed that the Toyota Camry at the Hartford CarMax dealership had three outstanding safety recalls on it at the time of our visit, including one for a power switch that could overheat and melt, possibly resulting in a fire. Five other vehicles sitting on the lot also had unfixed safety recalls, according to the government website.

CarMax declined an interview but told 20/20 in a statement that it doesn't automatically fix recall vehicles before selling them and only does so if a customer requests it. CarMax says it does inform consumers about any open recalls and recently upgraded its website so customers can look up open recalls online through the government database. CarMax also says it retrained its staff on its recall policy.

A coalition of consumer and safety groups filed a petition with the Federal Trade Commission this June, urging the agency to investigate CarMax’s safety recall policy. Rosemary Shahan, head of Consumers for Auto Reliability and Safety (CARS), is calling on the FTC to require CarMax to have all safety recall vehicles repaired before selling them to consumers.

“CarMax sells vehicles that are under safety recall without bothering to fix them,” said Shahan. “If they wanted to do it right, it would be very easy for them to do it right.”

When confronted about the Toyota Camry with three outstanding safety recalls, the Hartford dealership salesman said, “I’m not allowed to comment to this, but I know we just started a whole new process where we actually look these all up online.”

CarMax told 20/20 that it was “absolutely unacceptable for an associate to misinform a customer about CarMax’s recall policy.”

CarMax said the comments of employees shown in the 20/20 report “do not fairly represent the more than 20,000 CarMax associates who are committed to providing quality vehicles and doing right by our customers.”

CarMax noted that 95 percent of purchasers say they would recommend the company to family and friends.

Millions of Americans have bought CarMax vehicles, including 20/20 correspondent Gio Benitez before he joined ABC News. Although Benitez returned his car because of problems, CarMax promptly exchanged it for another vehicle.

Watch the full story on ABC News' 20/20 Friday at 10 p.m. ET.

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