Used car dealer Carvana can sell cars in Illinois through Aug. 31 after a court order Friday temporarily suspended a state ban.
On July 18, Illinois had banned Carvana for the second time in three months over issues with title transfers and out-of-state permits.
The state initially banned Carvana on May 10 due to customer complaints; the ban was lifted on May 26 following negotiations between the company and state officials.
Illinois has reinstated the ban, saying Carvana “was not transferring titles within 20 days of sale nor issuing Illinois temporary registrations to Illinois buyers. … Carvana would [also] issue temporary registrations up to four to five times from different states for the same vehicle,” as reported by Automotive News.
The Illinois secretary of state told Chicago’s NBC 5 WMAQ-TV that Carvana had failed to meet the negotiated guidelines.
“Vehicles that have already been purchased, but not yet delivered can still be delivered to the purchasers during the suspension, but no new vehicle sales can occur in Illinois during the suspension order,” the secretary of state’s office said, according to NBC 5.
In a Monday statement to The Washington Times, a Carvana spokesperson wrote that “State records indicate there have been over 500,000 title transfer violations in Illinois over the past 3 years - Carvana represents significantly less than 1% of that total, and over other 90 IL dealers had more title transfer violations than Carvana. … We sincerely appreciate the support from our Illinois customers and are excited to continue to serve them while we continue working with the State to resolve its concerns.”
On Friday, the 18th Judicial Circuit Court granted Carvana’s motion and issued a temporary restraining order to the Illinois secretary of state. That office is enjoined from revoking Carvana’s dealer certificates of authority and dealer plates through Aug. 31.
Carvana, known for its vending machine towers, has faced similar challenges in other states. The company avoided a similar ban in Florida by meeting a Jan. 31 deadline to process outstanding title applications.
Carvana faces pressure to cut costs as demand wanes and interest rates rise. As a result, “its stock has plummeted from a high of $370 last August to $22.25. In May, Carvana said it would lay off about 2,500 employees, or 12 percent of its workforce,” according to Automotive News.
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