Carvana Co., which faced regulatory scrutiny in Illinois last year, is backing legislation in the state that would codify vehicle home delivery and e-commerce sales procedures, such as collecting electronic signatures, in state law.
The online used-vehicle retailer said last week it is supporting Senate Bill 1896, which was introduced Feb. 9 by state Sen. Patrick Joyce, a Democrat whose district includes a small segment of south Chicago and the majority of Kankakee County. The bill, if passed, would amend the Illinois Vehicle Code to add text clearly stating that licensed vehicle dealers are permitted to conduct sales — including collecting electronic signatures — via the Internet.
The bill also would stipulate that dealers may deliver vehicles to a customer at their residence. An amendment to the bill itself, filed Tuesday by Joyce, expands its text to state that a vehicle may be delivered to a customer at the address they provide in an application for title if requested in writing and “only after the identity of the customer has been verified at the time of delivery.” If a vehicle is delivered to an address other than the licensed dealer’s place of business, the date of sale is the date the vehicle buyer signs that application, according to the revised bill.
In addition, the bill would provide that any documents required by state or federal law to be signed in person may be signed at the time of delivery “without constituting an off site sale that is subject” to the permit requirements for off-site sales.
“Up until now, Illinois State law has been silent on the issue of online cars sales,” Joyce said in a statement emailed to Automotive News. “This legislation aims to give a more clear explanation of the law by just adding a framework that will help build up the auto industry in Illinois.”
The bill would alter the Illinois code to give space to and clearly define e-signatures and home vehicle delivery within it. Online sales in Illinois have thus far existed in a gray area of the statute because they don’t fit current definitions of off-site sales or sales at a trade show exhibition laid out in the code, according to sources in Illinois state government.
Carvana was in regulatory hot water in Illinois after the state twice suspended Carvana’s dealer license last year over motor vehicle registration and titling infractions. The two entities settled the long-running regulatory dispute in January. While the provisions included in the new legislation don’t address the titling and registration requirements central to Carvana’s previous tangles, online sales and home delivery are critical to the company’s business model.
Digital sales and home delivery were increasingly adopted by dealers during the height of the coronavirus pandemic when dealerships were closed, and sales couldn’t be carried out in person.
“We looked at it,” Joe McMahon, executive director of the Illinois Automobile Dealers Association, said in a phone interview. “Even though Carvana is really pushing the legislation, it doesn’t only pertain to Carvana. It amends the vehicle code, which affects all dealerships. And e-signatures [are] something that would be fine with us.”
The association doesn’t “have a problem with the legislation,” though it is watching to see whether changes are made to it in the coming weeks, McMahon said.
“It’s not like we’re bending over backwards helping anybody,” McMahon said. “It’s just this is stuff that dealers can use. E-signatures will be great, [as well as] home delivery. If you want to put that in the statute and say it’s OK, I think we’re fine with that.”
The legislation last week was assigned to the Illinois Senate’s Judiciary Committee.
Carvana, in a news release detailing its support for the bill, said it has delivered 32,000 vehicles to Illinois residents since 2014.
“Home delivery has proven to be convenient, safe and it saves people time. This is why it is permitted in other states,” Alan Hoffman, Carvana’s head of corporate affairs, said in the release. “Across the state, tens of thousands of Illinoisans have benefited from home delivery and Carvana has invested more than $60 million to bring Illinois into the future and make car buying easier. Now is not the time to go backwards.”
McMahon said franchised dealers will do what’s necessary for the customer.
If “the customer feels more comfortable going over the internet, you can do an e-signature and have the car delivered — they’ll do that,” he said.