BALTIMORE — Online car dealer Carvana faces legal action and fines after some customers say they didn't get their title and registration paperwork in a timely manner.
Maryland now joins several other states in fining the company for these delays.
According to the Maryland Motor Vehicle Administration, between June 2021 and July 2022, Carvana accumulated 386 late title fee infractions totaling $17,121 in fines. That’s 10 percent of cars sold by Carvana in the state during that timeframe.
In Maryland, dealers are required to issue Maryland temporary tags on vehicles registered in Maryland and submit all required documents, taxes, and fees within 30 days of delivery.
For the 386 infractions, Carvana submitted registration paperwork 1 to 30 days after the 30-day deadline, but nearly a dozen were 151 or more days late.
Jack Boger bought a car from Carvana after seeing the ads promising a seamless car-buying process.
“I was compelled on the accessibility. You don’t have to go to a dealership and they can drop it right in front of your house,” said Boger.
He bought a 2020 Range Rover in May 2021. He put down $20,000 plus over $17,000 in trade-in value and thought the sale was finalized. So, he waited for his Maryland tags and title, but Carvana sent temporary tags from Georgia twice.
“They were having me print out different tags to tape onto my plate for six months,” said Boger.
Then in April, he noticed his auto-pay had been cancelled.
“So, I log in and it says that my car is in active repossession,” Boger said. “I see I made all my payments, everything is as it should be, so I give them a call and no one had an answer for me.”
He was instructed to turn in the car or it would be forcibly removed.
“As a business owner, I didn’t really want them coming to my work, or coming to my home that’s really embarrassing, so I surrendered the car to them,” said Boger.
Boger also paid over $8,000 in monthly payments and almost a year into having the car, Carvana never sent the title and confirmed it would not proceed with the sale of the car in his name.
“So now we’re here, months later, there’s no resolution. I have none of my money back and so there’s no answer. I have no idea what happened,” said Boger.
In an email to WMAR-2 News Mallory Sofastaii, a Carvana spokesperson wrote: “The customer’s version of events are not accurate but due to pending litigation we can't comment.”
Boger hired an attorney, who filed a complaint. A week prior, that same attorney filed another complaint for a different Maryland Carvana customer.
“The reason why I purchased a car from Carvana is it seemed like a pretty good deal,” said Jeff Mayko, who purchased a 2019 Dodge Ram on November 24.
Carvana delivered it with a 90-day temporary plate from Arizona.
“Then they had to give me another registration from Arizona, which ran out on me also, so now I have a truck that I can’t drive that I’m still paying for,” Mayko said.
WMAR-2 News asked Carvana about this. They refused to give an on-the-record response.
“Despite months and months and months, temporary tags being delivered from different states and so that car cannot be driven because if you drive a car that has no title and no tags, you could be arrested,” said Peter Holland, the attorney representing Boger and Mayko.
These accounts are similar to others filed with the Maryland Office of the Attorney General.
One customer filed a complaint, writing: “I purchased a 2013 Lexus GS 350 on January 22, 2021 from Carvana. I have received 8 different paper tags from different states.”
Another customer wrote: “It has been 4 months since purchase of the vehicle from Carvana, 2 state inspections, numerous odometer documents, 3 power of attorney letters, 3 temporary registrations, 50 phone calls to Carvana, and still no Maryland registration.”
Plus, Gregory Coulson who Sofastaii interviewed in February 2021.
RELATED: Carvana customer waits six months for Maryland license plates
Carvana sent him temporary tags from four other states before he received his Maryland tags.
“There's no reason it should take six months, none at all,” said Coulson.
Carvana has also faced regulatory actions and legal challenges in several other states including Arizona, Illinois, California, Pennsylvania, Texas, Michigan, North Carolina, and Florida.
In a letter to investors last year, Carvana acknowledged registration issues writing:
"Our explosive growth in buying cars from customers over the last two quarters created significant operational constraints in our system. Buying more cars from customers leads to more last-mile pickups, more customer care interactions, and more complex title processing requirements, which in turn leads to more complex registration processing."
A Carvana spokeswoman sent Sofastaii the statement below in response to recent fines and complaints:
"Carvana has pioneered online car buying by continuously delivering exceptional experiences, and we have bought and sold well over a million cars with customers while achieving an industry-leading Net Promoter Score (NPS) and a 4.7 out of five star customer experience rating average. The vast majority of our customers enjoy experiences that reflect a significant improvement for automotive retail. While we acknowledge there are rare instances where a customer's experience didn't live up to our brand promise, and we are working hard to fix those instances through continuous improvement, any discussion of those rare instances should recognize our scale and the number of customers we're buying from and selling to, as well as how successful most of those experiences are. That said, we stay hard at work making the best car buying and shopping experience available even better, which is evidenced by our industry-leading customer experience ratings.”
A few weeks ago, the judge in a class-action lawsuit in Pennsylvania denied Carvana’s motion to compel arbitration and dismiss the lawsuit. A pre-trial conference is scheduled for November 23.
In response to the recent court ruling, a Carvana spokesperson wrote:
“Carvana is one of the largest sellers of used cars in the country, and a handful of historical registration delays are not reflective of our outstanding customer experiences. This is just a procedural ruling, it doesn’t change that the legal theory of this case is wrong. We look forward to winning the case in court and view this as nothing more than a predictable attempt by class-action attorneys to try and profit off of minor alleged paperwork issues during the COVID-19 pandemic. Although Carvana does not agree with the ruling, it relates only to procedural issues that have nothing to do with the merits of the case. Carvana is confident that it will prevail once it is given the opportunity to present evidence of its superior customer experience.”
Click here to view the class-action lawsuit.
If you’d like to file a complaint with the MVA, click here.