Carvana, the relatively new CarMax competitor, hasn’t exactly been in the news for good reasons lately. Just a quick search shows it’s bleeding cash, it laid off workers the same day it spend $2.2 billion buying an auction company, it lost its ability to sell cars in Illinois twice, and customers have been filing tons of complaints. So it probably shouldn’t be surprising to hear that Carvana’s in trouble yet again.
Click on Detroit reports that a Michigan Carvana dealership has had its license suspended. State officials claim they made the decision after “employees destroyed documents, odometer records weren’t maintained, and investigators found more than 100 customer title delays and probation violations.”
In total, 112 customers were unable to get their titles and registration on time. The dealership also reportedly improperly issued temporary registrations, didn’t have their records available for inspectors, signed odometer disclosure forms in their customers’ names, and violated the terms of their probation agreement. Yeah, that’s not good.
It didn’t have to end this way, either. After a February 2021 inspection found several problems, the dealership was given 18 months to get its act together. But it was caught breaking the agreement, so the state brought the dealer in to yell at them again, then gave them a six-month extension. Since you’re reading this news post, obviously, the dealership did not, in fact, get its act together.
And while it’s just a suspension, it doesn’t sound like that particular Carvana will be back in business any time soon. The state has said it hopes to formally revoke the dealership’s license soon. Currently, it doesn’t appear that a date has been set, but considering they broke the terms of their probation twice, don’t hold your breath waiting for Carvana to get its license back.
That may be bad news for Carvana, but it sounds like great news for Michigan’s used-car buyers.
Update, Tuesday Oct 11: After publication, Carvana reached out to Jalopnik with the following statement:
At Carvana, we are always extremely focused on the safety and satisfaction of our millions of customers. We work collaboratively and in strong partnership with state leaders and regulatory agencies in many states across the country. In most instances, arcane and outdated regulations have struggled to keep pace with our innovative business model, technology and surging customer demand for a new, convenient and accessible way to shop, buy and trade-in used vehicles.
We reject the Michigan Secretary of State’s allegations as baseless and reckless and we strongly disagree with the state’s heavy-handed and abrupt effort to shut down a growing Michigan business with tens of thousands of customers over what amounts to technical, paperwork violations involving title and transfer issues.
We have already corrected 99 percent of the technical paperwork violations cited in the state’s report and welcome the opportunity to address the state’s ongoing concerns through constructive dialogue, changes to outdated regulations through legislation, or in the courts.
We urge the Secretary of State to begin dialogue to resolve this matter as expeditiously as possible. Meanwhile we will continue serving our customers, creating jobs and investing in Michigan while this matter is being resolved.