Carvana's Illinois dealer license gets yanked again

Carvana has been a font of odd news for a while, its superheated growth causing superheated problems. The online car dealer sold 6,523 vehicles in 2015. In 2021, that number was higher than 300,000. Issues with getting car buyers their titles and registrations in a timely manner continue to dog the company, as do problems selling cars with sketchy backgrounds and selling cars for which Carvana doesn't hold title. Most recently, Illinois' secretary of state stopped Carvana from selling cars there in May because of improper titling and use of temporary tags. The company got its dealer license back after pledging to use third-party services in Illinois to process titles and issue tags. Two months later, Illinois regulators have revoked Carvana's license again, saying the company committed the same violations it pledged to correct in May. The secretary of state's office told Chicago's NBC 5 that Carvana "continued to conduct business in a manner that violates Illinois law."

The revocation applies to vehicles purchased from July 19 forward. The secretary's office announced earlier this week, "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."

Carvana paid a $250,000 bond for the May infraction, meant to guarantee good behavior. Not only is that money gone, but it isn't clear when the suspension might end. The state said it had put "strict guidelines" in place for the dealer to resume local sales. Seeing that voluntary compliance didn't do the trick, it's possible Illinois will want to institute a punitive regime of provable compliance before giving Carvana the green light again. The state could also follow the lead of Michigan, which put Carvana on 18-month probation in May 2021 over the same kinds of problems.