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Illinois suspends Carvana’s dealer license over titling delays

Consumer complaints suggest that both Carvana and Vroom are facing challenges

Carvana vehicle transport truck
Photo (c) jetcityimage - Getty Images
The Illinois Secretary of State has temporarily lifted Carvana’s dealer license that allows it to sell cars to consumers in the state. 

In a statement to Automotive News, Henry Haupt, an Illinois Secretary of State spokesman, said the company has been charged with failing to properly transfer titles for some of the vehicles it sold in Illinois. The Secretary of State’s Office opened an investigation in February based on nearly 90 complaints from Illinois consumers.

Carvana did not immediately respond to media requests for comment, but the issue has been reported in a number of consumer review forms, including ConsumerAffairs.

Biswadip, of Prospect Heights, Ill., said he received what was supposed to be his permanent license plate for the car he purchased from Carvana. However, he later learned that the license plate number is not the one that appears on the registration.

“I called Carvana several times to give me a temporary plate so that I can at least drive the car but did not get any resolution,” Biswadip told ConsumerAffairs. “It's already two weeks now and still I can not drive the car because of the plate. I have a little baby at home and without (a) car life is getting difficult.”

Problem not limited to Illinois

Consumers in other states have also reported registration issues after purchasing a vehicle from Carvana. Skye, of Topeka, Kan., told us that they purchased a car in January 2020.

“The registration department put the wrong odometer reading on the title paperwork as 62,000 miles when the vehicle had about 32,000 miles,” Skye wrote in a ConsumerAffairs review. “It took Carvana almost two months to make the correction and get me the paperwork back with a correction form. I submitted everything to the DMV and thought everything was handled properly.”

Apparently, everything was not resolved in the way they thought. Skye claims the company never connected the odometer correction with the VIN. This created a serious problem when Skye tried to sell the vehicle.

“While trying to trade or sell my vehicle, I am being accused of odometer rollback fraud due to their error and failure to correct it,” Skye told us. 

Similar complaints about Vroom

Carmax’s competitor Vroom has experienced similar issues. As we recently reported, Texas Attorney General Ken Paxton has sued that dealer in response to consumer complaints about lengthy delays in transferring titles.

In our reporting on that story, auto industry analyst Cliff Banks, the publisher of TheBanksReport.com, told us that Vroom and Carvana appear to be the only dealers that are producing complaints about delays in titling.

“I think it's due to them both (Vroom and Carvana) trying to grow quickly and not having the processes in place as they enter new markets to adequately provide the services required in a vehicle transaction,” Banks said.

Both companies have similar business models. Consumers choose a vehicle from online listings, and the cars are delivered to their homes. Both companies were highly popular during the first year of the pandemic.

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