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NOVI — Carvana LLC voluntarily surrendered its Michigan dealer license Jan. 10 as part of a settlement agreement with the Michigan Department of State for multiple violations of the Michigan Vehicle Code.
“The settlement agreement cements Carvana’s ability to continue selling and delivering cars to Michiganders as it has done continuously since 2014 by using its innovative and consumer-friendly e-commerce business model,” said Alan Hoffman, head of external affairs for Carvana.
Carvana’s Michigan offices, located at 26890 Adell Center Drive in Novi and 2046 28th St. SW in Wyoming, Michigan, are owned by Paul W. Breaux. The state had suspended the dealership’s license on Oct. 7 as a result of the infractions. In accepting the settlement offer, Carvana admitted to: violating a probation agreement with the state, improper use of temporary registration, not having records available for inspection during reasonable or established business hours, failure to make application for title and registration in purchaser’s name within 15 days of delivery, failure to have properly assigned certification of title in immediate possession, and failure to maintain odometer disclosure records.
“To save taxpayer dollars that would go to court fees, it is standard practice for our department to offer plea deals to dealerships that violate the law and are likely to have their licenses revoked,” said Michigan Department of State spokesperson Jake Rollow. “In a plea deal signed with our department, the Carvana dealership in Novi agreed it had violated the law and to have its dealer license revoked and be barred from reapplying for a new license for three years.”
Carvana also has to pay a $10,000 penalty to cover the investigation’s cost.
As Carvana is also an e-commerce business, it is still able to sell vehicles to Michigan residents, but the paperwork, such as titling of the vehicles, will now be conducted outside the state. Michigan residents will still be able to pick up their purchased vehicles at the Carvana “vending machine” in Novi.
According to Rollow, the company had been operating a traditional brick and mortar dealership in Novi. He said that at the Novi location, potential customers could come see cars, take test drives, negotiate pricing and purchase a vehicle. As a result of the settlement, the company will no longer be able to offer any of those traditional services in the state, he said. Customers who purchase a vehicle from the company will now receive an out-of-state title and registration and have to have the vehicle retitled and registered in Michigan. Rollow said Michigan buyers will have to pay state fees to retitle and register any vehicle they purchase from Carvana.
“Michiganders can continue to conduct business with the Carvana company online but will need to retitle vehicles they purchase to Michigan,” said Rollow. “We continue to protect Michiganders by enforcing the law with car dealerships across the state and revoking the licenses of any dealer that fails to comply with the law.”
