Carvana Banned in Raleigh, NC, and Here’s Why

The online vehicle vending machine-type company, Carvana has been banned from selling vehicles in a major county in North Carolina.

Wake County, which is where the capital and most populous city in North Carolina is located, is where this company is now banned. This company cannot operate in the Raleigh, NC area for six months, which might serve as a huge blow to the company name.

The Right Blow and the Wrong Time

With semiconductor shortages causing production slowdowns and stoppages at many automakers, used car companies have experienced success across the country. Add the pandemic to the mix, and many buyers prefer the online vehicle shopping experience offered by Carvana and other digital car companies. To have a major hub of the company in the most populous county in the Carolinas shut down for six months is a serious blow to the brand.

Profits Were Up

Although this used car company was dealt the same blow as its competitors; low inventory levels due to higher demands for used models, profits were up. Even with fewer vehicles to sell, this company found a way to reach more customers with their vehicles and had a faster turnaround time than they had experienced in the past. This might be part of why they cut corners and ended up in the proverbial doghouse in North Carolina.

All it Took Was One Complaint

Before we get to the nuts and bolts of why this company is not allowed to sell cars in Wake County until the calendar turns to 2022, you should know the power of a single complaint. That’s all it took for the North Carolina DMV to take action, begin an investigation, and for Carvana to be put on notice and then suspended for their current sales practices.

What Caused the Complaint to be Filed?

In North Carolina, vehicles registrations and state safety inspections are required for all vehicles that are sold in the state. All it took was one customer having a hard time obtaining their registration and inspection at the NC DMV, and this company was then under investigation that will cause them to lose sales and profits for the next six months.

Both the lack of registrations and inspections are in violation of the dealer licensing in the state. A court filing against this company stated that the company was not delivering the vehicle title paperwork to the DMV in a timely manner. State-required inspections are also necessary before a vehicle can be sold in North Carolina, which was the second part of the problem with how Carvana was doing business in Wake County.

More to the Story

Not delivering paperwork on time is one thing; foregoing the state-required inspections is another, but the most egregious violation of Carvana was something else entirely. This company also sold vehicles in North Carolina and issued out-of-state plates and tags, which is a greater violation of dealer licensing laws. This might have been the final straw that caused the suspension in Wake County, but it’s certainly something that shoppers should be aware of before turning to this company for a used vehicle.

What Does Carvana Need to Do?

Sales suspensions for violations of dealer licensing laws come with actions that must be taken by the offending company. In this case, Carvana cannot sell any vehicles in Wake County for 180 days beginning August 2. All vehicles at this location have to be labeled, “not for sale,” which should be pretty obvious when shoppers try to purchase a vehicle from this company through online processes.

Additionally, the company has to review all of its other locations in the state to ensure the proper registrations are being issued, title paperwork is being filed with the DMV in a timely manner, and state-required inspections are completed for all vehicles that are ready to be sold. Registrations and inspection paperwork are also to be given to customers in a timely manner after each sale of a vehicle at the various locations.

What Will This Mean for Carvana?

This ban in one county in North Carolina will not likely be a widespread problem, but it may cause other states to review the sales practices of this company. After six months, Carvana will be able to reopen the Wake County location, and the supply of used models sitting and waiting to be sold will be available to customers in the area. The Raleigh, NC area will soon have its car vending machine working again, but not until this company complies with the NC DMV.