Used-vehicle retailer Carvana, facing another setback, had its license suspended by Michigan on Friday for repeated violations covering titles, registrations and odometers.
Michigan's Department of State on Friday said that the license for Carvana had been summarily suspended for several alleged violations of the Michigan Vehicle Code. The violations were discovered during an investigation of multiple no-title complaints from consumers, the state said.
The state said the violations by Carvana include:
- Failing to make application for title and registration within 15 days of delivery for 112 customers since agreeing to an earlier probation extension
- Committing fraudulent acts in connection with selling or otherwise dealing in vehicles where Carvana employees admitted to destroying title applications and all applicable documents pertaining to the sale of three vehicles that were sold to customers and Carvana took the vehicles back
- Failing to maintain odometer records
- Improperly issuing temporary registrations
- Failing to have records available for inspection during reasonable or established business hours
- Possessing improper odometer disclosure records on which the odometer disclosure had been signed on behalf of the purchaser
- Violating terms of a probation agreement 127 times
"These continued violations create an ongoing imminent threat to the public health, safety or welfare of the public, requiring emergency action," MDOS said in a statement, adding that it will seek to revoke the dealer's license at an administrative hearing.
A Carvana spokesperson said the state's action represents another example of gross regulatory overreach that illegally harms both the company and Michigan residents.
"Over 98 percent of our Michigan customers receive their registration in a timely manner and the state's suspension, which came without any notice and in illegal violation of Carvana's due process, is based on isolated incidents representing 1 percent of our Michigan sales," the spokesman said. "Carvana is ready and willing to discuss a swift resolution with the state, as we've already solved their concerns. In the meantime, Carvana will continue selling cars to Michigan customers."