Carvana Gets Green Light for Used Car Sales in Illinois after Reaching a Settlement Agreement

After a Bumpy Road of Litigation, Caravana Can Resume Operation in Illinois

Online used car dealer Carvana has been given the green light to operate in Illinois after it agreed to settle a long-running regulation dispute with the state.

The trouble for Carvana began in February 2022 after the Secretary of State’s Police Department began to investigate the online dealership for violating state business regulations.

The investigation was the result of hundreds of customer complaints regarding titling and registration practices. For many consumers who purchased used cars through Carvana in Illinois, owners had to wait months for their new vehicle purchases to be properly registered and titled over to them. In many cases, this left customer’s paying for vehicles that they were not allowed to drive because of improper registration or titling.

The Troubled Cost of Carvanas Illinois Operation

On May 10, 2022, the Illinois Secretary of State suspended Carvana’s license to operate in the state. The Illinois Secretary of State accused the car vending machine company of failing to properly transfer the correct titles for the vehicles it sold to consumers. Additionally, the company was accused of issuing out-of-state temporary registration permits in an improper manner. Both practices were a direct violation of Illinois state business regulations.

Although the state stayed the May 10th suspension on May 26th, Illinois suspended the company’s license again on July 18th. In response, Carvana filed to have a temporary restraining order placed against the secretary of state. The order was granted by an Illinois judge and Carvana was subsequently allowed to continue operating in the state.

Although they were allowed to continue selling used cars, they did so in a severely restricted manner. One of the restrictions was requiring the titling of Carvana vehicles to be done through Illinois’s remitters or third-party establishments that are allowed to operate in the state of Illinois
and process title transactions.

Carvana Agrees to Settlement but Denies Wrongdoing

After a highly contested back-and-forth battle, Carvana and Illinois Secretary of State Alexi Giannoulias shared that they reached a settlement that would allow the company to continue operating in Illinois. As part of the settlement, Carvana has agreed to abide by new state restrictions that were designed to protect consumers.

In announcing the settlement, Giannoulia shared, “The admission by Carvana demonstrates what we know all along; that Carvana was violating the law in a manner that was harmful to Illinois customers.” He added, “Under my administration, I will do everything to ensure that proper safeguards are in place that protects Illinois consumers regardless of how they purchase a vehicle.”

Although the car company has agreed to the settlement, they have not admitted to any wrongdoing. However, in a statement shared with the media, Carvana’s head of corporate affairs, Alan Hoffman shared, “For the past eight years, we have been an economic engine in the state by providing Illinoisans with an unmatched e-commerce experience that includes great selection, home delivery, and a 7-day money-back guarantee and today’s agreement with the Secretary of State allows us to move forward in our journey to becoming the largest automotive retailer.”

Although they did not admit to any wrongdoing, they did admit that “in certain circumstances,” they failed to transfer title to the purchaser within 20 days from the date of sale of the vehicle.”