Carvana’s License to Sell Suspended in Illinois

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Used car giant Carvana has lost its license to sell cars in Illinois, at least temporarily. Illinois is the latest in a string of states to raise questions about Carvana’s handling of titles and registrations.

Title Problems

The state of Illinois has revoked Carvana’s license to sell cars “until it resolves problems with getting buyers’ vehicle registrations and titles,” the Chicago Sun-Times reports.

“Vehicles purchased in Illinois through Carvana can be picked up, but no new sales can occur,” explains Henry Haupt, a spokesperson for the Illinois Secretary of State’s office.  The office opened an investigation after receiving more than 90 complaints from buyers. Many didn’t receive titles for cars bought through Carvana.

Some received out-of-state temporary registrations instead of required Illinois paperwork.

Similar problems led North Carolina to suspend Carvana’s license in the Raleigh area for six months last year. The Wall Street Journal reported, “a state investigation determined that the company failed to deliver titles to the motor vehicle department and sold cars without state inspections.”

Related: Car Title Guide – Everything You Need to Know

Florida threatened Carvana with suspension in February. Afterward, the company reportedly processed hundreds of late title applications ahead of a state-imposed deadline.

Illinois owners ticketed for expired registrations, Haupt says, “should pay the fines and the Secretary of State will work with Carvana to get them reimbursed.”

Carvana says it “strongly disagrees with the state’s characterization of both the facts and the law leading to this action.”

Explosive Growth in Pandemic

Carvana, known for its giant car vending machines, grew rapidly during the early days of the COVID-19 pandemic.  Studies showed that buyers preferred spending as little time as possible in dealerships, and enjoyed the ease of online car shopping. Carvana’s promise of hassle-free used car shopping from home was perfect for the moment.

But, CNBC reports, “Carvana purchased a record number of vehicles last year amid sky-high prices and rising inflation, in preparation for unprecedented demand that has since slowed.”

Carvana laid off approximately 12% of its workforce last week.

Its stock price has dropped from a high of $370 last August to around $38 today.

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