Legal settlement online seller
A Carvana site in Westminster. Photo credit: Screen shot, Google Street View

Online vehicle seller Carvana will pay $850,000 to settle a lawsuit alleging it was operating in California without a dealer’s or transporter’s license, officials said.

District attorney’s offices in San Diego, Santa Clara and Ventura counties joined the Los Angeles District Attorney’s Consumer Protection Division in leading the investigation and prosecution in the case.

Under a judgment negotiated with the company and signed by Los Angeles Superior Court 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 – of $50,000 to each district attorney’s office,
  • $50,000 in restitution to be distributed to a nonprofit charitable organization that supports public interests.

Carvana did not admit any wrongdoing. The company has been selling cars to California consumers since 2015, but did not obtain a dealer’s license until May 2019, according to Los Angeles District Attorney George Gascon.

Beginning in September 2017, Carvana delivered numerous cars to California customers using its own delivery vehicles, but had no transporter’s license, according to Gascon.

Additionally, Carvana sold many cars between May 20, 2019 and June 30, 2019, allegedly without providing inspection reports to its customers prior to sale as required by California law.

The judgment requires Carvana to obtain all necessary licenses to sell and transport cars in California and provide California buyers with copies of completed inspection reports before completion of sales.

“Not having a business license is illegal, opens your company up to lawsuits and is unfair to the consumer,” Gascon said. “Business owners have the responsibility to obtain the licenses needed to operate their business legally.”