Online used-car dealer Carvana is having customer service problems, with reports from Florida and North Carolina about months-long delays in the delivery of title and registration documents. The company’s not talking about it to the media.
A report this week by WFLA television in Tampa, Fla., covered multiple customers who waited so long for titles that Carvana ultimately offered to buy the cars back, along with instances where Carvana apparently issued out-of-state license tags illegally.
One customer, Michael Johnston, said he had been waiting more than four months to get the title for an Infinity SUV. He told WFLA that Carvana sent him two temporary Florida license plate tags to tide him over, and then mailed him a third tag from Arizona, the location of Carvana’s headquarters. But that tag was no good in Florida, and resulted in Johnston getting pulled over by police on two occasions.
Finally, Carvana offered to buy back the car rather than deliver the car’s title. Johnston declined the offer. “They have refunded me some of my money I paid toward two payments on the car because the car sat for 60 days unusable,” Johnston was quoted as saying. He added that Carvana had promised to deliver the title in “a few more weeks.”
Another customer, Joshua Johnson, also declined a buy-back offer. He was happy with the Tesla he bought from Carvana and had invested money in it. “I’m pretty much at their mercy and I hope they’re able to resolve the issue and it works out in my favor at least somewhat,” Johnson told WFLA.
These were just the latest complaints out of Florida. In September, Florida state regulators settled a complaint against Carvana on behalf of 12 customers who had similar beefs with Carvana dating from February 2020. State law requires dealers to deliver titles within 30 days of purchase, and Carvana missed the deadline in all cases.
The firm settled the complaint by paying a fine of $500 per customer, or $6,000 in total.
Similar complaints got Carvana into more trouble in North Carolina. In August, Carvana lost its license to sell cars in Wake County for the rest of 2021. As reported in AutoNews, that case involved delayed delivery of titles, the provision of an out-of-state temporary tag (as in the Johnston case in Tampa Bay) and the selling of a car without a state inspection.
Carvana offered a written statement to AutoNews in August, saying it was “pleased that we were able to reach a solution with the North Carolina DMV (Department of Motor Vehicles).”
It added: “We’re proud of the tens of thousands of North Carolina residents we’ve served since 2014, and are excited to continue delivering exceptional customer experiences there for many years to come.”
The AIM Group emailed Carvana asking why title and registration seems to be a common sticking point, but got no response.
But the problem is clearly rooted in Carvana’s massive, unrelenting growth since its launch in 2012. Its number of vehicles sold rocketed from 6,500 in 2015 to 245,000 in 2020. Last quarter’s 108,000 sales represented year-on-year growth of 96%.
In quarterly calls with investors, the difficulty in keeping up with customer demand is a common theme. The term “constraints” — referring to shortages of various resources, including staff, was mentioned 61 times during the last four earnings calls.
For example, in the company’s most recent call (Q2 2021), Carvana CEO Ernie Garcia, III, stated:
“So those constraints can show up in longer delivery times, slightly higher odds of missing a delivery time and having to reschedule it. They could show up in registration delays.
“They can show up in all kinds of different ways. So I think the most important thing that we can do right now is catch up to the demand that we’re seeing because the machine that we have delivers extremely high-quality customer experiences … . And today, we’re behind, so I think that would be the number one area to focus.”