Carvana's vending machinesCarvana's vending machines


Online retailer Carvana banned from US state over botched paperwork

  • Carvana banned from state of Illinois for mishandling paperwork
  • Licence revoked due to ‘the misuse of issuing out-of-state temporary registration permits and for failing to transfer titles’
  • Online retailer ‘strongly disagrees’ with ruling and is ‘actively working with the state to resolve this issue’

Time 11:29 am, May 19, 2022

Online car retailer Carvana has been dealt a blow in its bid to boost profitability after it was banned from a US state for mishandling paperwork.

The US outfit, famed for its car vending machines, has had its licence revoked in Illinois after state officials found it botched paperwork related to sales.

It was found that the firm issued out-of-state temporary registration permits when it should not have done so and failed to transfer titles.

It means Carvana will no longer be able to sell any cars in the state, although cars that have already been purchased can still be delivered.

The retailer said it ‘strongly disagrees’ with the action taken and insisted it was ‘actively working with the state to resolve this issue’.

The news comes just days after the Reuters reported that the platform had been forced to lay off around 12 per cent of its workforce.

Despite being forced to part with 2,500 members of staff, the firm said earlier in the week that it was expecting ‘strong earnings for 2023‘.

Bosses said its current poor financial results, which saw the company lose $260m in Q1, were the result of a fall in demand for used cars, sky-high prices and supply shortages.

The precarious financial position has only added to questions over the long-term sustainability of online car retailers.

On this side of the Atlantic, Cazoo recently admitted it ‘may never achieve profitability’ and rumours continue to swirl that rival Carzam has reached the end of the road.

Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.

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