NBC 5 Responds

Carvana Drama: Customers Report Delivery Delays, Miscommunication After Recent State Ban Went Into Effect

The whiplash for some Carvana customers came after the Illinois Secretary of State's office suspended the company’s license for the second time in two months.

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It’s been one thing after another for many Carvana customers since they recently went with the new modern online approach to purchasing a used vehicle.

The Illinois Secretary of State’s office announced last week that it had suspended Carvana’s dealer’s license for the second time in two months, meaning the company was banned from further sales until it addresses the state’s complaints. 

Those complaints center around Carvana’s business practices, including delayed title transfers and the alleged misuse of out-of-state temporary tags for hundreds of Illinois customers.

Some customers reported waiting more than a hundred days for the title transfer of a car they purchased when, by state law, it’s supposed to take 20 days. 

Now, some Carvana customers tell NBC 5 Responds that they are in the dark as to when they will receive the vehicles they selected months back, which were due to be delivered soon. 

Those customers claim the company is blaming the state for those delays, even though the state has permitted the company to carry out sales made before the license suspension took effect. 

"On the phone, [CARVANA] told me the delay was due to the dispute with the Sec. of State’s office," one customer told NBC 5 Responds by email. 

The customer said they were supposed to receive the vehicle they purchased in June last week. But when they called Carvana’s customer service, they said the company "told me they are not delivering any cars in Illinois right now… I’m pretty frustrated with the whole process."

After sharing that customer’s complaint with the Secretary of State’s Police Department, the office tells NBC 5 it has specifically told Carvana that it is obligated to deliver the vehicles that customers purchased on or prior to July 18, the date that the latest suspension order took effect.

"We’ve had numerous phone conversations with them to explain,” said Captain Elmer Garza with the Secretary of State Police. "That is solely on Carvana. That is not the state's position. They are obligated to deliver that vehicle to that consumer." 

Garza also confirmed that Carvana is obligated to deliver the cars, while also abiding by stricter guidelines enforced by the state on Carvana’s operations, including a ban from issuing out-of-state temporary tags. 

The new rules have proven to be difficult for the Fortune 500 company, according to evidence the state says it has showing Carvana has continued to issue out-of-state tags in the months since the new rules were imposed.

"We have over 107 signed complaints, we have three to four hundred late transfers," Captain Garza said, referring to the volume of Carvana customers who have contacted the state for help.

Some Illinois customers have even reported being stopped by law enforcement, or were issued tickets because of Carvana’s registration delays, the Secretary of State’s office said, adding that it’s trying to help those customers resolve their situation.  

"It’s probably the worst or one of the worst issues I’ve seen with a car dealership in my 16 years here," Garza said. 

Carvana tells NBC 5 it will deliver all cars that were sold prior to July 18, or the date when the latest suspension order took effect. 

A company spokesperson also told NBC 5 it will defend its modern approach to selling used cars online. 

"We aim to better understand the Secretary of State’s perspective and to work with them to resolve the rare instances with issues, but will defend our practices," a Carvana spokesperson wrote by email.

Carvana Suspension Timeline

  • May 10, 2022 - Carvana’s Illinois Dealer's License is suspended
  • May 26, 2022 - State Comes to Agreement With Carvana, Suspension Order “Stayed” or Lifted
  • July 18, 2022 - State revokes Stay Order, reinstates suspension of license

The Illinois versus Carvana drama started on May 10 when the state first revoked the company’s dealer’s license, suspending its operations in the state. 

That suspension was the result of an April inspection by the Secretary of State’s office of Carvana’s Oak Brook location, marked on the map with a towering vehicle vending machine the company has become known for.

Inspectors with the state said the inspection on April 27 was "initiated due to the discovery of 159 instances wherein Temporary Registration Plates (TRPs) were issued to vehicles sold," according to the initial suspension order. 

Carvana's location in Oak Brook, Illinois.

TRPs, in the state of Illinois, are only allowed to be issued once to a customer, while the company is supposed to transfer the title or or file the necessary paperwork with the state to receive permanent registration and license plates for the vehicle sold.

The types of customer complaints surrounding delayed title transfers that the state received mirror those that NBC 5 received earlier this year.

Many customers have told state regulators, and NBC 5 Responds, they waited months for a title or registration on their vehicle from CARVANA, something that normally should take days to receive. Lisa Parker has the story.

Inspectors walked into Carvana’s Oak Brook vending tower in April after receiving customer complaints, but walked out discovering "nearly 300 violations of failure to transfer title within twenty days of the sale of the vehicle," according to court records. 

Those violations can carry a misdemeanor charge in criminal court, and up to a $500 fine per occurrence, according to the state.

Carvana’s license suspension is part of an overall criminal case filed in the Dupage County Circuit Court against Carvana LLC and Paul Breaux, an attorney for Carvana out of Tempe, Arizona, who was also listed on Carvana’s state license. 

In a statement, the company told NBC 5 that the “rare instances” of issues are, in part, the result of vehicle registration processes designed decades ago. 

“Our home delivery, 7-day return policy, and nationwide vehicle selection, when combined with title and registration processes designed decades ago, can in rare instances lead to complicated paperwork circumstances,” Carvana’s statement reads in part. 

After paying a hefty $250,000 deposit with the Secretary of State’s office, court records show Carvana’s license suspension was stayed or lifted on May 26. 

The agreement between Carvana and the Secretary of State’s office included the company abiding by stricter guidelines, no longer issuing TRPs or out-of-state tags, and would work with a licensed remitter or third-party, and resolve all consumer complaints shared with the state. 

A quote from the Illinois stay order, issued on May 26, 2022.

While Carvana resumed its operations under this framework, it would only last for 53 days.

After news of Carvana's second suspension order on July 18 was shared online, there were many individuals who came to Carvana’s defense on social media, blaming the state and accusing it of playing politics. 

These users claimed to be former customers of Carvana, who said their purchase sailed through smoothly. 

The Secretary of State’s office defended the actions it has taken against the company. 

“It's not the ‘state playing politics,’” Capt. Garza said. “It's the business practices of Carvana. We wouldn't be in this situation if they would do the right thing: Sell the vehicle, transfer the title paperwork when they're supposed to within 20 days of sale, and not issue multiple temporary registration permits (TRPs) to that vehicle from other states.” 

“You don’t sell a vehicle in Illinois as a licensed dealer without the title for that vehicle, it’s as simple as that and all the problems go away,” Garza said. 

Carvana said it stands by its modern business model of selling cars online, and that it has proven nationwide to be a successful alternative. 

“Carvana has sold more than 40,000 cars to Illinois residents and nationwide has earned hundreds of thousands of five-star reviews from our customers,” Carvana’s statement to NBC 5 reads. “We stand by our customer-centric business practices and believe that our customers making us the fastest-growing automotive retailer ever means they stand by us as well.” 

The Secretary of State’s office said if Carvana customers are dealing with delivery delays, or delays in receiving titles or registration for their vehicle, the office may be able to assist.

“If a consumer has issues with their title and registration with a vehicle they purchased, they may contact the Illinois Secretary of State Police at 630-693-0551.”

Have a consumer complaint? Call 1-844-NBC-RESP or click here to let us know, so we can help.

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