Michigan suspends Carvana's dealer's license for repeat violations [UPDATE]

UPDATE: Carvana has issued a statement on the Michigan suspension. It has been included below.

Carvana is known for offering a convenient remote car buying experience, but the company also has a growing reputation for dropping the ball with customer service and meeting regulatory requirements. Illinois has taken the company to task several times, and now it appears Michigan authorities are ready to crack down. The Michigan Department of State (DoS) has suspended a Carvana dealership’s license after it found more than 100 title delays and other violations.

Michigan first hauled Carvana into a hearing back in March 2021. At that time, the state fined Carvana $2,500, and the company admitted to several violations. Carvana was back in a hearing in January 2022 for violating the terms of its probation, and the company paid a $5,000 fine. Officials say they continued receiving complaints and hearing from people who couldn’t get the title for their new cars, leading the state to suspend Carvana’s license.

Though the state suspended Carvana’s license, it now wants to revoke the company’s dealer’s license. Illinois and Michigan may be taking action against the company, but they’re hardly the only problem spots. Earlier this year, a Maine woman pursued the company for reimbursement after a Volkswagen Tiguan she’d just bought broke down at a gas station and ended up towed. Her ordeal cost almost $2,000, and Carvana didn’t agree to pay for her expenses and time until after the story grabbed national news attention.

Carvana this week issued the following statement:

On Thursday, Carvana filed a motion to immediately stop the Secretary of State’s illegal and irresponsible attempt to shut down a growing Michigan business with tens of thousands of customers over what amounts to technical paperwork violations involving title and transfer issues. The Secretary of State has brazenly violated state law in addition to its own rules, regulations and due process requirements while making false and reckless statements through press releases rather than engaging in constructive dialogue to remedy what are essentially technical paperwork issues. The arbitrary and abrupt actions of the Secretary of State have angered and disappointed our customers, some of whom have literally been stranded without a vehicle they had counted on to get them to work, doctors’ appointments or the grocery store.

 

We respectfully ask the courts to hold the Secretary of State accountable, halt its disruptive actions and compel state bureaucrats to work collaboratively with Carvana and our customers to remedy these technical issues as quickly as possible. We’re confident the facts and the truth will come to light through the court process, and with our modernized, industry-leading Carvana customer experience, we look forward to our continued growth, job creation and investment across Michigan.

Carvana saw its fortunes and stock prices soar as the pandemic shut down traditional car dealerships and people avoided shopping in person. Cracks have begun showing in the company’s foundation, though, as heavy losses and a shift in car prices have caused its stock to tumble and led to thousands of layoffs.