has been admitted to multiple violations of Michigan’s motor vehicle code in a plea agreement with the state that allows it to continue doing online business there.
Carvana (ticker: CVNA) failed to timely transfer car titles to its customers and had misused temporary state license plates amid other violations, the company acknowledged in the Tuesday agreement with Michigan’s Secretary of State, which was provided to Barron’s.
The auto retailer also agreed to surrender the license to sell cars at its only Michigan location, a “vending machine” tower near Detroit, for at least three years. However, it can continue to deliver vehicles ordered online by customers in the state.
“The settlement agreement cements Carvana’s ability to continue selling and delivering cars to Michiganders as it has done continuously since 2014,” Carvana’s external affairs chief, Alan Hoffman, said in an emailed statement.
Carvana stock is up 25% to $6.90 in Thursday trading.
The Michigan Secretary of State’s office had no comment on the agreement, which also levied a $10,000 fine on the car dealer.
The deal came three months after the Secretary of State’s office ordered the suspension of Carvana’s license at the Detroit-area location. Carvana had missed state deadlines to apply for registration on behalf of 112 customers between February and October of last year and had improperly issued temporary license plates, officials said at the time.
The suspension did not stop home delivery of vehicles ordered online, Carvana has said.
Michigan is one of several states that sanctioned Carvana last year over title-transfer issues. Barron’s has reported on how some Carvana customers haven’t been able to legally drive vehicles purchased from the company for months because Carvana failed to register cars in their names.
Last month, Carvana reached a tentative deal to settle a civil complaint with the Illinois Secretary of State’s office over similar allegations, according to state spokesman Henry Haupt. He declined to disclose the terms of the deal ahead of its formal execution later this month.
Carvana was separately charged last year by Illinois officials in a criminal complaint alleging dozens of instances where the company failed to transfer vehicle titles and other alleged offenses. A hearing for Carvana to respond to those allegations has been delayed several times, and is now scheduled for February.
The company did not respond to requests for comments from Barron’s on the civil settlement and criminal case.
Write to Jacob Adelman at [email protected]
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