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Carvana facing multiple complaints, legal actions

On Behalf of | Jul 14, 2022 | Dealer Fraud

Online car buying companies have grabbed a larger share of the market in recent years. They’ve been able to take advantage of customers’ distaste for haggling about price with salespeople and the general trend toward buying just about everything online.

Now one of those companies, Carvana, is finding itself at the center of multiple customer complaints over its failure to transfer registrations to the buyers before their temporary registrations expired. The company – perhaps best known for its multi-story car “vending machines,” has left new car owners with vehicles they couldn’t legally drive. One man who was ticketed twice for not having plates or registration stopped making payments, so his vehicle was repossessed.  

Class-action suit filed in Pennsylvania

A class-action suit has been filed in Pennsylvania on behalf of hundreds of Carvana customers in multiple states who didn’t receive their permanent tags, title or registration and were left to risk getting pulled over whenever they drove their car. 

The suit claims that the company violated Pennsylvania’s Unfair and Deceptive Trade Practices Act. It contends in part, “Carvana’s failure to timely register the cars as it promised and received money to do — sometimes for a period exceeding two years — causes consumers to be questioned and sometimes arrested by law enforcement while driving the temporarily registered cars.”

Carvana has reached a settlement in another state that included closing one of its vending machine locations for six months. It’s also facing administrative actions in at least two other states where its ability to do business has been suspended.

Did overwhelming sales leave Carvana scrambling to catch up?

A report in Barron’s indicated that with its sales skyrocketing over the past couple of years when people were hesitant to go out any more than necessary, the company was sometimes selling vehicles before it even had their titles, so they couldn’t transfer those titles or registration to customers in a timely manner.

The company contends that there is just a “very small percentage of instances” where customers didn’t get their permanent tags and the title wasn’t transferred within the time required by their state. However, the legal and administrative actions, coupled with the negative publicity, have caused its sales to drop significantly.

It’s crucial for car buyers to know what their rights are and when they’ve been violated by car dealers. Having legal guidance can help you protect your rights and seek justice and compensation.

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