Carvana, Illinois Dealers Want Online Car-Buying Rules Clarified

Online used-car retailer Carvana and franchised new-car dealers are business rivals, but both sell cars online and both home-deliver them — routinely in Carvana’s case, and increasingly often for franchised dealers.

That’s enough common interest so that in Illinois, Carvana and the state’s franchised dealer association would both like to see the passage of recently introduced legislation that would update portions of state law to clarify the rules for automotive e-commerce and home delivery.

“It would ultimately, I think, benefit all dealers” if the legislation passes, says Larry Doll, legal counsel for the Illinois Automobile Dealers Assn.

A bill introduced Feb. 9 by Democratic State Sen. Patrick J. Joyce makes explicit what have become increasingly common practices related to automotive e-commerce and home delivery in Illinois, but which are not provided for under the existing law.

For example, the bill specifically authorizes licensed new- and used-car dealers in Illinois “to conduct sales activities, including the collection of electronic signatures, via the internet and deliver vehicles to a customer at the customer’s residence or other suitable location.”

The bill also provides that any documents which state or federal laws require to be signed in person may be signed at the time and place of delivery. The bill is pending in the state Senate Judiciary Committee.

“In a time when you can get just about anything sent to your door with the click of a mouse, should a car be any different? Home delivery has proven to be convenient, safe and it saves people time. This is why it is permitted in other states,” says Alan Hoffman, head of corporate affairs at Carvana.

A Carvana press release encourages Illinois consumers to visit a website, delivermycarhome.com, which is set up to make it convenient for consumers to send state officials an email encouraging them to support the new bill. Carvana is based in Tempe, AZ.

In eight years of operating in Illinois, the online used-car chain has sold more than 84,000 vehicles in the state, including home deliveries of more than 32,000, or 38% of the total, Carvana reports.

The state dealer association says it’s not that Illinois intends to ban home delivery as such. It’s more the case that the law needs updating, in light of the growth of e-commerce and home delivery, especially since the pandemic.

Carvana has a recent history of run-ins with the Illinois Secretary of State’s Office, which regulates motor vehicles in the state and has jurisdiction over many of the issues addressed in the legislation.

Illinois Secretary of State Alexi Giannoulias twice suspended Carvana’s used-vehicle retailer’s license in 2022 over motor vehicle registrations and titling issues. Carvana and the state reached a settlement on those issues in January.

But in the course of negotiations over the settlement, the parties concluded that some of the issues raised in Carvana’s case could potentially affect all dealers, and legislation updating the relevant state laws is called for.

Doll, the attorney for the state dealer association, says the trade group welcomes the proposed legislative changes, but he says the association had no role in crafting the proposed legislation. He also says the dealer association had no role in the earlier controversies between the state and Carvana.

“That was between Carvana and the secretary of state, we were not involved,” Doll says. “We’re keeping an eye on it.”