Carvana, Illinois regulators ‘in discussions' about retailer's ability to sell in the state

Representatives for Carvana Co. and the Illinois secretary of state met Wednesday in Illinois court for a scheduled hearing — the latest step in a legal challenge that's unfolded over the online retailer's license to sell used vehicles in the state.

The matter arose in early May, when the secretary of state suspended Carvana's dealer license. The regulatory agency said its police unit had investigated several consumer complaints and discovered a pattern of Carvana failing to properly transfer titles for vehicles it sold and misusing the issuing of out-of-state temporary registration permits. The agency stayed the suspension order May 26, saying Carvana could sell vehicles as long as it followed "strict guidelines."

When additional consumer complaints emerged, the secretary of state again attempted to suspend the online retailer's license in July, at which point Carvana filed for injunctive relief. That request was granted July 29 by Judge Bonnie Wheaton of the 18th Judicial Circuit Court in DuPage County, west of Chicago, temporarily nixing the agency's ability to suspend or revoke Carvana's license. A hearing, originally scheduled for the end of August, was moved to Wednesday.

The agency remains "in discussions" with Carvana over the status of its license and vehicle titling and registration problems following the hearing, Dave Druker, spokesman for the secretary of state, told Automotive News. The next public hearing is scheduled for Dec. 12, he added.

"The continuance of this week's proceedings reflects Carvana's consistent willingness to negotiate a resolution to the state's concerns, and gives Carvana's customers confidence that Carvana's platform is available in Illinois," Carvana said in a statement to Automotive News.

"We appreciate the surge of support from our Illinois customers while we work with the state on a long-term resolution. We are confident we will successfully defend the right of Illinois residents to continue to buy and sell cars online through our industry-leading e-commerce platform."

Carvana is allowed to sell used vehicles in Illinois under some restrictions — the same ones it was subject to under the May 26 stay order, Druker said.

Carvana can't handle license plates or temporary registration permits; the retailer must go through a licensed Illinois remitter to get those to the agency. The company must have a vehicle's title on hand when it goes to a remitter, Druker said. Remitters are third-party entities licensed to process title transactions.

"The restrictions they have to work under now [are] what we originally asked for," Druker told Automotive News. "That hasn't changed."