Dealer's Journal Car Buying,Used Why Carvana is Banned in Illinois… Again

Why Carvana is Banned in Illinois… Again

Why Carvana is Banned in Illinois... Again

Carvana is banned from selling cars in Illinois. That would be big news if it were any other company, but Carvana can’t seem to get things right anywhere.

Specific laws and regulations dictate how many, what kind, and where vehicles can be purchased and sold. These laws are meant to protect consumers from companies, which as Carvana. Last May, this massive used car company was banned from selling cars in Illinois and now they’re banned once again. The worst part about this ban isn’t that it impacts Carvana an its ability to sell cars in the state, but that it effects the customers buying cars from the company.

Isn’t Carvana that vending machine company?

In some terms, yes, Carvana is the used car company that sells car and advertises them using a large vending-machine-like platform. This might be their claim to fame, but what makes this company attractive to many used car shoppers is the fact that the vehicle purchased will be delivered right to your doorstep. Although some regular car dealers did this during the COVID-19 pandemic, most dealers have gone back to business as usual with shoppers visiting the dealership location to do business.

Why has this company been banned in Illinois?

Every state has its own set of vehicular rules, regulations, and laws, but most of them are similar to neighboring states. One of the most common laws is that each vehicle in a state must be registered to be legally driven. While most used car dealers can issue temporary tags that allow new owners to drive their vehicles while the paperwork is processed from the dealership to the local DMV, when those temporary tags expire, vehicle owners have had problems. Unfortunately, after this initial expiration time, if owners haven’t received required paperwork they can’t legally drive their cars.

Carvana has been banned from selling cars in Illinois because customers who bought cars from this company were left out in the cold. These customers didn’t receive the registrations or titles from the company or DMV in a timely fashion, causing many drivers to be stuck in a lurch. If this was the first time that Carvana had been suspended for such actions it might not be a big deal, but this is only one more event in a series of issues for this company.

Additionally, upon having the suspension lifted and agreeing to adhere to the DMV laws, Carvana continued to sell cars and failed to provide customers with registrations and titles.

It gets worse

Not only was Carvana guilty of failing to provide new owners the vehicle titles and registrations, but they were also abusing out of state registrations by giving Illinois residents out of state plates and registrations. This is against the law in Illinois, and illegal in most states. Typically, if a car dealership, even one that’s part of a nationwide company, must provide a registration for the state in which the vehicle was purchased. For customers that live out of state, the customer is required to take the necessary paperwork to the DMV to have the vehicle registered.
Unfortunately, Carvana is guilty of shady business practices once again.

Other troubles from Carvana

The fact that Carvana has been banned from selling cars in Illinois for the second time for the same issue isn’t much of a surprise. In fact, this exact problem raised its ugly head a few years ago in North Carolina. The company used out of state registrations illegally and agreed to change but didn’t. If this were where the bad business practices ended, it wouldn’t be too alarming or surprising, but this company has been acting in bad faith for a long time.

The Commonwealth of Pennsylvania caught wind of issues with Carvana back in 2018 when it was discovered this company failed to operate within the state’s Consumer Credit Code. Specifically, Carvana had been selling cars and entering into installment sales contracts with customers dating back to 2014 without having a license to do so.

Carvana tried to argue they weren’t required to have a license since the company sold cars to residents of the state but wasn’t a Pennsylvania dealership. Eventually, Carvana had to pay $117,375 in fines before the state would grant Carvana a license.

Carvana couldn’t meet Florida timelines

There’s nothing surprising about any troubles surfacing in Florida. The title and registration issues that raised its ugly head in other states also occurred in Florida. According to Florida law, dealers must turn over title and registration documents to buyers within 30 days. Carvana was failing to do that and failed repeatedly. In fact, that 30-day timeline ended up taking as much as eight months in some cases. When this happened, customers couldn’t drive the cars they bought because those temporary tags expired and the customer had no proof of ownership of the vehicle to take to DMV.

This title and registration problem, which arose in several other states including California, Michigan, North Carolina, Illinois, Pennsylvania, and Texas.

Carvana didn’t do its homework

The next problem shouldn’t come as any surprise, especially if you’ve read through this far. Carvana sold a stolen vehicle to a customer. This can be the proverbial icing on the cake. The stolen car was a Hertz Rental Car that was located at the Memphis Airport when it was stolen. The car had a title from California and was sold by Carvana in Denver.

This stolen vehicle had several open titles on it and when the Carvana customer received it, the car has severe damage to it. The only way the new owners (Carvana customer) found out this car was stolen, occurred when a tow truck came and took it away. Eventually, this customer got the car back but got rid of it quickly because it was discovered the car was not only stolen, but badly damaged in a wreck and improperly repaired. The Carvana listing for this vehicle didn’t list any damage history; does this surprise you.

The bottom line

The bottom line is that Carvana has been guilty of several poor business practices that negatively impact customers. If you’re looking for a used car, it’s probably a good idea to avoid any vehicles sold by Carvana. It might look like a good deal, but it could be more headaches than it’s worth down the road.

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