LOS ANGELES – Carvana, an online retailer selling cars using multi-story vending machines, will pay $850,000 to settle a civil lawsuit alleging the company was operating in California without a dealer’s or transporter’s license, Los Angeles County District Attorney George Gascón announced.
“Not having a business license is illegal, opens your company up to lawsuits and is unfair to the consumer,” Gascón said. “Business owners have the responsibility to obtain the licenses needed to operate their business legally.”
Under a judgment negotiated with the company, entered July 20 in the Los Angeles County Superior Court and signed by Judge Armen Tamzarian, Carvana was ordered to pay:
- $600,000 in civil penalties, $150,000 to each of the four district attorney’s offices;
- $200,000 in investigative costs, $50,000 to each district attorney’s office;
- $50,000 in restitution to be distributed to a nonprofit charitable organization to support work that advances the public interest.
The company, which did not admit wrongdoing, has been selling cars to California consumers since 2015 but did not obtain a dealer’s license until May 20, 2019. Beginning in September 2017, Carvana delivered numerous cars to California customers using its own delivery vehicles but had no transporter’s license. The judgment requires that Carvana obtain all necessary licenses to sell and transport cars in California.
Additionally, Carvana sold many cars between May 20, 2019 and June 30, 2019, without providing inspection reports to its customers prior to sale, as required by California law. The judgment requires that Carvana provide California buyers with copies of completed inspection reports prior to sale.
The Los Angeles District Attorney’s Consumer Protection Division led the investigation and prosecution in this case, which also involved the district attorney’s offices in San Diego, Santa Clara and Ventura counties.