Carvana Novi dealer license revoked for 3 year for violating Michigan vehicle code

Posted at 10:52 PM, Jan 12, 2023
and last updated 2023-01-12 23:27:17-05

NOVI, Mich. (WXYZ) — The owner of the Carvana location in Novi had his dealer's license pulled this week after admitting to violating the state's vehicle code.

Under a plea agreement with the Michigan Department of State, the dealership wouldn't be able to reapply for a dealer's license for a period of three years.

Back in October, Kim Jerrmanus sold her car at the Carvana location in Novi. At the time, she was told the dealership was being audited.

"I mean, OK. I was just like I want to get it over with, so I just didn't pay attention to it," Jermanus said. "And then I started hearing about everything afterward."

When she sold the car, she, unfortunately, missed the sign posted on the dealership's window stating their license was suspended.

The state alleged they had committed a number of violations including "failing to maintain odometer records" and "improperly issuing temporary registrations."

It's a claim Carvana at the time called baseless.

"I was pretty much sitting there thinking is the state going to come in and close them down and I am going to be in the middle of a lawsuit," Jermanus said.

This week, the dealership admitted to five vehicle code violations, including:

  • Violating a probation agreement
  • Improper use of temporary registrations
  • Inability to provide records in a timely manner
  • Failure to submit applications for buyers' titles and registration within 15 days Failure to obtain odometer disclosure records

The dealership has now agreed to have its dealer license revoked and be barred from reapplying for a new license for three years. The owner of this location is also facing a $10,000 fine to cover the cost of the state's investigation.

"Well, that's what happens," Jermanus said.

In a statement, a spokesperson for the Carvana company said 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.”

At this location, customers can no longer come see cars, take test drives, negotiate pricing and purchase a vehicle

Per the state, they can continue to sell cars to Michiganders online, but those cars will not be titled or registered in Michigan at purchase, so the buyers will pay state fees to retitle and register any vehicle they purchase from Carvana.