Carvana brands itself as a modern, stress-free way to purchase a used car – online at the click of a button, with no need to step foot onto a dealership’s showroom floor.
Now, the popular company on a fast track to success has suddenly hit the skids here in Illinois.
The Illinois Secretary of State’s office recently briefly suspended Carvana’s license to operate after mounting scores of customer complaints.
In addition to those complaints, some customers turned to NBC 5 Responds after they waited months for a missing crucial component for their purchase.
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Those customers tell NBC 5, as well as state regulators, that they waited months for title transfers, and believe the Fortune 500 company misused out-of-state temporary tags.
For Christine Trinidad in Romeoville, she ended up waiting 201 days for the permanent registration and license plates for her 2018 Jaguar XF she purchased last August.
“It’s my dream car, the one I’ve been waiting for,” Christine told NBC 5.
Christine contacted NBC 5 earlier this year when she was caught in the thick of it.
The good news: She got the car she coveted from Carvana.
The bad news is the part that should have come after she signed on the dotted line: the registration and license plates for her new ride.
With her purchase last August, Christine said she only received temporary tags and a promise from Carvana that she would have her Illinois plates in 90 days.
Those 90 days came and went.
Every time she called, texted, and emailed Carvana for her permanent registration, Christine said the company had no answers, only apologies for the inconvenience and a new 90-day countdown that would start over.
“I was concerned that this car may not be registered correctly and that I could get in trouble,” Christine said. “It was stressful.”
Christine’s fears were not far off.
In recent months, seven Carvana customers here in Illinois reached out to NBC 5 Responds with similar stories.
NBC 5 Responds resolved their problems after contacting Carvana directly, but those same customers are worried about others out there, unaware of the problem.
Have a consumer complaint? Call 1-844-NBC-RESP or let us know, so we can help.
Turns out the problems those customers describe are playing out nationwide, according to Philadelphia Consumer Law Attorney Robert Cocco.
“We’re dealing with a systemic issue,” Cocco said.
Cocco said he has talked to hundreds of customers nationwide after he filed a class-action lawsuit in January against Carvana over this very issue (to read the lawsuit, click here).
The lawsuit alleges the company has failed “to timely register cars as it promised and received money to do,” and that has led “consumers to be questioned and sometimes arrested by law enforcement.”
Cocco explained, “This adds insult to injury. Not only don’t you have what you paid for, now you’re getting thrown in jail for Carvana’s errors.”
Carvana has asked a judge to dismiss the class-action lawsuit, moving the complaints out of court and into arbitration, according to court filings reviewed by NBC 5.
Those arguments will be heard by a judge next month.
Cocco said temporary tags with cars are typically only issued one time, and that's what's unusual about this situation.
“A driver is allowed to operate a vehicle using [temporary tags] typically only 30 to 45 days,” Cocco said. “That’s not what we’re dealing with here. We’re dealing with a systemic issue in which Carvana is issuing temporary tags multiple times – six to eight times – because of their inability to provide permanent registration for these vehicles.”
In some cases, Cocco said, and as detailed in the class-action lawsuit, customers are unaware that the temporary tags are registered out-of-state, or temporarily registered not in the purchaser’s name, but Carvana’s name only, leading to stops from police
“Even if it’s a valid temporary tag, we have found very often these tags are not registered in the name of the consumer purchaser,” Cocco said. “How’s a law enforcement officer to know the person they stopped is just having a dispute with Carvana, and the problem is with Carvana, and not a problem of them stealing one of Carvana’s vehicles.”
Back in Romeoville, after months of back and forth, Christine said she again hit a wall in February when Carvana told her, “We’re sorry… you’re not going to receive your plates.”
“I was absolutely frustrated. And I watch NBC 5 Responds all the time,” Christine said.
After NBC 5 Responds contacted Carvana, the company sent Christine the plates and title she was due: 201 days after her original purchase.
Knowing now that she’s not alone, Christine believes state regulators made the right move, getting involved with Carvana.
“I had to believe that I wasn't the only consumer that this was happening to,” Christine said. “So, I was relieved, actually, that [the state] stopped them.”
Late last week, in a statement to NBC 5 Responds, Carvana said the company was permitted to resume “normal service” here in Illinois, adding that it “delivered all previously purchased vehicles during this recent period, as we discussed the situation with the State.”
State regulators said: not so fast.
“The Illinois Secretary of State’s office implemented a stay on Carvana’s temporary suspension order, allowing Carvana to conduct business in Illinois under strict guidelines,” an Illinois Secretary of State spokesperson said.
An Illinois Secretary of State spokesperson said Carvana is making progress towards getting its license fully reinstated, but called it simply “a step in the right direction” with strict guidelines still in place.
The strict guidelines include a requirement “that Carvana post a $250,000 bond to guarantee payment of any fines or fees incurred by customers that resulted from Carvana’s failure to follow the law.”
“It is important to note that this stay order is a small step forward that allows Carvana to operate on a limited capacity while the process moves forward,” a state spokesperson said.
The statement continues, “During the stay, Carvana is allowed to sell vehicles to Illinoisans, but Carvana cannot issue temporary registration permits or license plates during this stay order.”
The state specified that as of now, Carvana can no longer sell a car in Illinois if the company doesn’t have the title or paperwork required to issue a plate or temporary registration permit for the vehicle.
“Carvana has to take all the paperwork (including the title) and fees to [an authorized third-party] who will issue a plate or temporary registration permit (TRP) and send the paperwork to the Secretary of State within 5 days,” a spokesperson confirmed.
Illinois officials said the state received more than 90 consumer complaints over the company’s unexplained misuse of out-of-state temporary tags.
Some of those complaints have still yet to be resolved, the state said.
“While all of the violations have not been corrected, the Secretary of State Police is working to resolve all existing complaints against Carvana,” The IL Secretary of State’s office said.
“Secretary of State Police can reinstate the suspension order at any time.”