Carvana Violates Licensing Laws, Says Class Action

This class action brings suit against a list of Carvana companies, on behalf of other used auto dealerships, alleging Carvana has repeatedly broken dealership laws, such as not delivering titles to the Department of Motor Vehicles (DMV) on time and improperly issuing out-of-state temporary license tags or plates to customers who had no connection to those states The defendants include Carvana, LLC, Carvana & Company, Carvana Cars, LLC, Carvana and Company of NC, LLC, Carvana Fac, LLC, and Carvana Logistics, LLC.

Two classes have been defined for this action:

• The State Class is all North Carolina individuals or entities duly licensed by the North Carolina Department of Motor Vehicles to operate as dealerships for the marketing and sales of used motor vehicles at any time from November 18, 2018 on.
• The National Class is all individuals or entities in the fifty states duly licensed by their respective state’s law to operate as dealerships for the marketing and sales of used motor vehicles at any time from November 18, 2018 on.

According to the complaint, the two main issues cited here—not delivering titles to the DMV on time and issuing out-of-state tags—are problems because vehicle buyers cannot drive the vehicles until they are resolved. The complaint alleges, “Carvana takes unreasonable amounts of time, sometimes weeks or even months, to resolve vehicle title issues and even requests the consumer to incur additional costs that were not initially disclosed.” In addition, the complaint claims, some vehicles are not given state inspections before they are sold.

Carvana advertised that it has vehicles for sale in locations where it has no license to operate, the complaint alleges, as well as advertising vehicles that may be in another county or state, without revealing this to the customers. In this way, the complaint alleges, it can pretend to offer large numbers and varieties of vehicles for sale even though the vehicles are not readily available to the customer.

Carvana has three licensed locations in North Carolina. But the complaint claims, “These locations consist of a building that operates as a giant car-vending machine. Carvana delivers the purchased cars through this vending machine building and direct delivery to buyers throughout North Carolina.” This means, the complaint says, that Carvana does not comply with dealer licensing laws in a number of respects, such as offering no showroom, no books or records at the location, and no ability for a DMV inspector to appear to conduct oversight.

The complaint alleges Carvana commits other infractions of the licensing laws. For example, customers cannot see the Buyer’s Guide for the vehicle before purchase or complete all paperwork before delivery, the complaint claims, and Carvana may deliver vehicles with hidden costs.

The complaint alleges that Carvana has unfairly taken business away from other licensed dealerships by failing to follow licensing laws. According to the complaint, Carvana licenses have been suspended or Carvana has been placed on probation or sued in other states as well.

Article Type: Lawsuit
Topic: News
Tags: Deceptive Advertising, Licenses or Licensing, Unfair Business Practices, Unfair Competition