Illinois stops Carvana sales over delays with registrations, titles

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Online car dealer Carvana cannot do business in Illinois until it resolves problems with getting buyers vehicle registrations and titles, the Illinois Secretary of State’s office said Monday.

Spokesman Henry Haupt said the office suspended Carvana’s license to operate in Illinois after investigating consumer complaints. He said Carvana failed to get buyers their titles within a 20-day period specified under law and in some cases were four to six months late.

He also said Carvana unlawfully issued buyers temporary vehicle registrations from another state. The out-of-state registrations were issued as replacements for temporary registrations in Illinois that expired after 90 days, Haupt said.

“Vehicles purchased in Illinois through Carvana can be picked up but no new sales can occur,” Haupt said.

He said some Carvana customers were ticketed in Illinois for expired registrations. Those customers should pay the fines and the Secretary of State will work with Carvana to get them reimbursed, Haupt said. He had no estimate on when Carvana’s business license might be restored.

The company is known for its brightly lit “car vending machines” where vehicles are retrieved by purchasers. One such building is in Oak Brook and another is planned in Skokie. Carvana also delivers cars directly to buyers.

A Carvana spokesperson said in an email that the company strongly disagrees “with the state’s characterization of both the facts and the law leading to this action.” The spokesperson said the company is working to resolve the matter “with minimal disruption to customers.” 

The Phoenix-based company last week said it was laying off about 2,500 workers, or 12% of its workforce, and its top executives would give up salaries for the rest of 2022 to fund severance. It had reported losing $506 million during the first quarter of 2022, a deficit six times higher than its result from the same period in 2021.

The financial publication Barron’s reported Carvana has had similar trouble with registrations and titles in North Carolina, Michigan and Florida. It said those states either imposed or threatened sanctions against the company.