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cars on a lot at a dealership
Grewal Law, PLLC
(855) 610-0503

According to a recent report by the Wall Street Journal, used car seller Carvana is facing hundreds of customer complaints about its sales practices.  Although it’s not alone among companies in the sector facing compliance and satisfaction issues – CarMax is another – the proportion of complaints is higher than its competitors.

Part of the difficulties facing used car sellers involves the mish-mash of state court laws addressing titling and delivery of used cars.  These problems have been exacerbated by a shortage of new cars due to global supply chain difficulties, putting pressure on used car sales.  As major used car retailers scramble to acquire enough inventory to meet the demand, other procedural requirements like obtaining and transferring titles have been strained.  Local used car dealers have faced similar problems with title transfers for years, but their familiarity with state laws is an element of institutional knowledge Carvana and CarMax have yet to acquire.

Used car sales are hardly a niche.  The largest retailer, CarMax, posted double-digit increases in sales and revenues in the most recent quarter, bringing in $8 billion.  Even so, it missed its earnings estimate – meaning market analysts think there is more potential growth in the business.

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