Judge gives Carvana green light to sell cars in Illinois ahead of late August hearing – NBC Chicago

In a twist of events, a popular online used car seller has been given the green light to operate in Illinois after its license was suspended by state officials last month.

Fortune 500 company Carvana recently succeeded in a DuPage Circuit courtroom after a judge granted the company’s request for a temporary restraining order against the Illinois Secretary of State’s office, lifting a ban on sales in Illinois until Carvana his day in court.

The secretary of state has suspended Carvana’s dealer license twice since May, barring the company from selling nationwide until it looks into complaints filed against it.

Those complaints centered around customers in Illinois and across the country who reported waiting months, and in some cases up to a year, to own or register a vehicle after purchasing it.

Meanwhile, clients have reportedly received temporary out-of-state permits on several occasions, although they are typically only meant to last 30-45 days.

The Secretary of State’s Police Department told NBC 5 Responds it has received more than 300 complaints from Illinois residents waiting for titles or registration information.

In at least one case, the state said Carvana’s delays resulted in a customer being cited by law enforcement for not having proper driving records.

While the state said the number of customer complaints was in the hundreds, lawyers representing Carvana said in court that the number of transfer violations it was responsible for was much smaller and that the latest license suspension by secretary is in violation of state law.

The dispute between the state and Carvana has left customers in the middle, especially at a time when there are limited options available in the used car market.

Although the state has told Carvana it is allowed to deliver cars to customers who made purchases on or before the date of the latest suspension, July 18, many told NBC 5 the company is delaying deliveries.

“Purchased a car from Carvana and was waiting for delivery,” one customer wrote to NBC 5 Responds on July 27. “I am now being told that Illinois has stopped their ability to deliver the car that was purchased before the July 18th date. It’s just ridiculous, I’ve been waiting since June and they have the car at the Oakbrook facility.”

This customer just received the vehicle last week on August 4th, almost two months since he made his original purchase.

When asked about delayed deliveries, Carvana insisted to NBC 5 via email that it plans to “deliver all vehicles sold prior to September 18th.”

Many customers have told state regulators and NBC 5 responds that they have been waiting months to title or register their vehicle from CARVANA, something that normally takes days to receive. Lisa Parker knows the story.

Through its creative ads and towering vehicle vending machines, Carvana is known for its modern approach to buying or selling a used vehicle: Everything online at the touch or click of a button, branding as a way to “avoid the hassle of the typical” experience of a used car dealer.”

The company says this new approach is why its business model has been called into question here in Illinois and elsewhere.

In addition to the complaints reported by the clerk’s office, NBC 5 Responds has also heard from many customers who said that after purchasing a vehicle from Carvana, instead of receiving a title or permanent registration document within a month , they have been issued outside set temporary tags repeatedly over many months.

Abuse of temporary out-of-state tags is also at the center of a class-action lawsuit filed against Carvana in January representing drivers nationwide (Carvana asked the judge in that case to dismiss the class action and move the complaints out of court and into arbitration. The judge’s ruling expected in the coming months.)

A Carvana spokesperson did not respond to NBC 5’s request for an on-camera interview about the state licensing ordeal, but said in an email that “Carvana has built its entire business around the user experience and shares the state’s commitment to reducing paperwork challenges as much as possible.” “

The spokesperson added that the company hopes to “improve the title and registration system itself for the benefit of everyone in Illinois who buys a car.”

In an interview with NBC 5, Illinois Secretary of State Police Capt. Elmer Garza said the state has taken the step to suspend the company’s dealer license for the same car title and registration system it sells to Illinois drivers.

“They didn’t transfer the titles in time,” Garza said. “The bottom line here is to take care of the consumer first.”

In a recent court filing dated July 25, Carvana asked a DuPage Circuit Court judge to lift the state’s suspension through a temporary restraining order, alleging that the secretary of state “violated the Illinois Administrative Procedure Act,” a state law that “requires the party to be given an opportunity to be heard at a hearing prior to the suspension of his business license.”

The only exception to this legal requirement is if “the public interest, safety, or welfare imperatively requires urgent action.”

Carvana argues that this high bar was not met by the State’s evidence and that its delays in transferring ownership of vehicles did not endanger public safety.

“There is no exigent case compellingly requiring the suspension of Carvana’s licenses without a hearing,” Carvana wrote in part in its motion for a temporary restraining order.

The motion continues: “The suspension order arises out of alleged recordkeeping violations. . . . These alleged violations do not create a public safety concern, and the Secretary’s hypothetical claims to the contrary cannot justify the use of extraordinary powers.”

The Secretary of State disagrees, arguing that it is a matter of public safety, particularly law enforcement.

For example, in its response to Carvana’s motion, the State argued that “Law enforcement would not be able to properly identify a vehicle used in the commission of a crime if that vehicle was not properly registered.”

The state added that “peddlers’ signs cannot be adequately accounted for” and that it “endangers the safety of the general public and law enforcement. Law enforcement officers conducting a roadside stop cannot properly identify the owner of the vehicle.”

Carvana is known for its high-rise car dealerships, such as the one in Oak Brook, Illinois.

Despite the lack of a public hearing, many Carvana customers have filled that void by advocating for the company online.

“Illinois has and always will be interested in money,” a Facebook user commented on NBC 5’s page.

When asked about this, the state argued that this was not a political game, but that Carvana was following the law.

“It’s absolutely not the state playing politics,” Captain Garza said. “These are absolutely Carvana’s business practices. We wouldn’t be in this situation if they did the right thing. They sold the car. They transferred the title deeds when they should have.”

DuPage Circuit Court Judge Bonnie Wheaton sided with Carvana on July 29, granting its request and lifting the state’s stay order, meaning the company can resume operations until it has its day in court.

Carvana has an administrative hearing with the secretary of state scheduled for Aug. 30 and a separate criminal hearing with DuPage Circuit Court on Aug. 31.

When asked for comment, the state confirmed that strict guidelines are still in place for all vehicles sold by Carvana between now and then.

“Because of the judge’s decision … the Secretary of State’s stay order has been reinstated, allowing Carvana to do business in Illinois under strict guidelines.”

The state said those strict guidelines include not issuing temporary registration permits or license plates during the stay order and registering titles through Illinois payers or third parties licensed in Illinois to process title transactions.

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