The dealer chain was given several probationary periods to correct its behavior. Now, Michigan wants to take its license for good after suspending it.
Carvana Detroit, in Novi, Michigan, had had its license suspended after dealership employees allegedly destroyed documents and failed to maintain odometer records. On top of that, state investigators found that more than 100 customer titles had been delayed. To boot, the dealership committed probation violations, which ultimately led to the suspension of the license.
Carvana dealers have been in hot water before, whether it's a $300 handout over a customer's lemon Volkswagen Tiguan or any number of delayed titles in Florida - the dealer chain has earned itself a bad name recently. The investigation into the Novi-based Carvana began after multiple complaints were filed by customers who couldn't get titles, just like in Florida.
Carvana has issued a statement on the matter. "We reject the Michigan Secretary of State's allegations as baseless and reckless and we strongly disagree with the state's heavy-handed and abrupt effort to shut down a growing Michigan business with tens of thousands of customers over what amounts to technical, paperwork violations involving title and transfer issues." Per Click on Detriot, the Michigan Department of State (MDOS) found a number of violations, including improper issuing of temporary registrations, 127 violations of its probation agreement, and others.
But most importantly, Carvana allegedly failed to make an application for title and registration within 15 days, as per Michigan law, for 112 customers. This came after agreeing to an earlier probation extension.
We should note that this is exactly the reason Florida officials filed administrative complaints against the dealership chain. Carvana says it has "already corrected 99 percent of the technical paperwork violations cited." It said it is happy to cooperate and will continue "creating jobs and investing in Michigan" in the meantime.
"These continued violations create an ongoing imminent threat to the public health, safety, or welfare of the public, requiring emergency action," the MDOS said in its press release. It says issues started in February last year when it found multiple issues during a compliance inspection.
On March 23, 2021, a conference was held, resulting in Carvana being placed on an 18-month probation on May 7, 2021. The dealership also paid a $2,500 fine and admitted to code violations. The agreement stipulated that all employees who handled paperwork would attend the MDOS' dealer training program. Carvana then broke the terms of its probation, resulting in another conference with Carvana on January 11, 2022.
This time, a six-month extension to Carvana's probation was signed, and with it came a $5,000 fine. Again, the dealership admitted to several more violations. Despite this, the MDOS continued to receive complaints from customers who couldn't get titles, just like in Illinois, where this has also been an ongoing theme for the chain.
The department has said it's going for the jugular this time and is looking to revoke Carvana's license altogether at an administrative hearing. Carvana insists it is in the right and has said it will "welcome the opportunity to address the state's ongoing concerns through constructive dialogue, changes to outdated regulations through legislation, or in the courts."