About two months after officials allowed Carvana to resume sales in Illinois, the company’s license to sell cars in the state has again been suspended. The move stems from Carvana’s practice of improperly supplying customers with out-of-state temporary plates and the company’s failure to transfer title to vehicles sold in the state in a timely manner.
On Monday, the Illinois Secretary of State’s enforcement division reinstated its suspension of the company’s dealer’s license after “Carvana continued to conduct business in a manner that violates Illinois state law,” Henry Haupt said in an email.
Carvana’s Illinois dealer’s license was originally suspended in mid-May, but officials there placed a stay on that order after about two weeks, saying the company had come into compliance with state requirements.
Haupt said Monday that Carvana (ticker: CVNA) has violated the terms of the stay by again issuing out-of-state plates to Illinois customers, which is illegal in Illinois, and by missing required deadlines to process title and registration paperwork.
Carvana also violated an agreement to have temporary plates issued through a third-party licensing agent, rather than doing so itself, Haupt said.
Carvana didn’t immediately respond to an email seeking comment. When the suspension order was first issued in May, the company said it disagreed with Illinois’ characterization “of both the facts and the law leading to” the action.
Issues related to late title transfers and the use of out-of-state plates have also resulted in increased oversight of Carvana in Pennsylvania, where officials suspended the company’s license to issue temporary permits at its two vending-machine towers in that state. A suspension in a North Carolina county ended in January, though the company remains on probation in another North Carolina county. Carvana’s license is also on probation in Michigan over registration issues.
Carvana has said it is confident that its operations are designed to meet state standards.
Vroom (VRM), which also sells used cars online, has faced scrutiny over similar problems. It recently agreed to pay an $87,000 fine in Florida and is defending itself against a lawsuit in Texas filed by prosecutors in that state.
Vroom has said that it has been targeting investments toward improving its titling and registration process.
Write to Jacob Adelman at [email protected]
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