BIZ-CARVANA-SETTLEMENT-ILLINOIS-TB

A Carvana glass tower sits illuminated on Feb. 23, 2022, in Oak Brook, Illinois. 

Used-car retailer Carvana admitted to violating state law by failing to transfer car titles in a timely manner and has reached a settlement agreement with the state, officials said Tuesday.

The agreement calls for Carvana to abide by Illinois law going forward, surrender a $250,000 bond and allow inspections by secretary of state police to ensure compliance, according to a news release from Illinois Secretary of State Alexi Giannoulias. Under the agreement, the state can suspend or revoke Carvana’s license again if the company is found out of compliance with either the settlement agreement or with state law.

Illinois first suspended Carvana’s license in May 2022 after launching an investigation into the company’s practices in February prompted by customer reports that the company was issuing out-of-state temporary registration permits and failing to transfer titles in a timely manner, the secretary of state’s office said. Before the settlement agreement, Carvana could only sell cars under the terms of a temporary restraining order set by a DuPage County judge.

Carvana sells cars from a “vending machine” in Oak Brook that opened in 2019. The company did not provide information Tuesday about a proposed location in Skokie that was stalled last summer, saying only it was in “direct contact” with the village.

The $250,000 bond Carvana is being required to surrender will go to compensate people who were fined for late registrations or otherwise lost money through buying a car with Carvana, Henry Haupt, spokesperson for the secretary of state, said in an email. Those who were fined are encouarged to call the secretary of state’s office at 630-693-0551.

In a news release, Giannoulias said Carvana’s practice of putting unregistered license plates on their cars had put drivers at risk of being ticketed for driving without proper title and registration. He said customers who have issues with their title and registration can call the office to file a complaint and get a title transferred.

“The admission by Carvana demonstrates what we knew all along: that Carvana was violating the law in a manner that was harmful to Illinois consumers,” Giannoulias said in a statement.

In a statement, Carvana head of corporate affairs Alan Hoffman said the agreement would allow Carvana “to move forward in our journey to becoming the largest automotive retailer.”

“We look forward to working with Secretary Giannoulias to ensure customers continue having access to the best car buying and selling experience possible,” Hoffman said.

Illinois was the first state to suspend Carvana’s license, Haupt said. Michigan also recently settled with the company, he said.

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