Carvana Admits It Broke Illinois Laws To Settle Months-Long Dispute

Carvana has reached a settlement with the state of Illinois over months-long regulatory issues involving motor vehicle registrations and titling issues. Illinois Secretary of State Alexi Giannoulias announced the settlement with the used car retailer known for its vehicle vending machines.

As part of the settlement, Carvana can continue to sell vehicles in Illinois, as Giannoulias states in the video announcement posted below.

However, Carvana had to admit to violating Illinois law and agreed to act in accordance with new restrictions aimed at protecting consumers. It also surrendered a $250,000 bond, agreed to obey the law in the future, and to "pre- and post-licensing Secretary of State Police inspections to ensure it remains in compliance." In addition, the retailer agreed to allow the Secretary of State to "summarily suspend and revoke" its dealer license if it fails to comply with the law and the agreement.

"The admission by Carvana demonstrates what we knew all along: that Carvana was violating the law in a manner that was harmful to Illinois consumers," Giannoulias said. "Under my administration, I will do everything to ensure that proper safeguards are in place that protect Illinois consumers regardless of how they purchase a vehicle."

The Secretary of State's office began investigating Carvana last year after consumers complained about delays in registration and titling following their purchases. The state first suspended Carvana's license last May following an investigation that revealed the company did not properly transfer titles for used vehicles it sold. Furthermore, it misused issuing out-of-state temporary registration permits.

For its part, Carvana confirmed it will continue selling vehicles to Illinois residents online and at a location in Oak Brook, a Chicago-area suburb.