Online car dealer Vroom sued for deceptive trade practices

Customers tell 5 On Your Side they're running into a new problem with online car dealer Vroom.

However, there's been a change in Texas where Vroom is based. The company is now only able to issue one 60-day temporary tag to out-of-state customers.

While Vroom blames the change on the Texas DMV, the DMV says Texas law hasn't changed. By law, licensed Texas dealers can only issue one buyer's tag per vehicle sold, and that tag is good for up to 60 days. Dealers are also required to submit the title transaction within 30 days of sale, or 45 days for a dealer-financed sale.

If there is a delay by Vroom delivering a title and it takes them longer than 60-days, customers will not be able to legally drive their vehicles until Vroom can deliver the title.

Vroom initally told 5 On Your Side that drivers could get additional temporary tags through North Carolina's DMV, but we checked and NCDMV officials told us they do not issue temporary tags to North Carolina residents that purchase vehicles in other states.

Vroom then sent us this statement:

"We are very sorry to report that the Texas Department of Motor Vehicles (DMV) unexpectedly changed its temporary tag rules, without advance warning to the public. As a result, 30-day extended temporary tags are no longer available for customers whose vehicles reside outside of Texas. Vroom takes this matter very seriously and we are evaluating all options to assist customers affected by the Texas DMV’s actions. In the meantime, Vroom has set up a special phone hotline to assist you if your Texas tags have expired and your permanent plates have not arrived, call us at 855-478-6172 8:00am-8:00pm est.

The new restrictions on issuing temporary tags resulted from a recent change in interpretation and policy, which came in the DMV's bulletin issued on April 11, 2022. Until that change, dealers could obtain 30 day temporary tags for vehicles sold out-of-state as well as in-state. The April 11 bulletin changed the ability to apply for extended 30-day tags, which dealers cannot issue on their own but must apply to a government office to receive. Previously, all dealers, including Vroom, were allowed by the state to apply for and receive the 30-day tags. Out-of-state customers of all Texas dealers, including Vroom, have been affected by the change."

Vroom is also being sued for deceptive trade practices.

Many of the allegations in the Texas Attorney General's lawsuit echo what 5 On Your Side has reported.

Since our last report on Vroom a month ago, we've had six more viewers reach out to us mostly with trouble getting tags and titles.

Shanel Joseph-Kouri's can't legally driver her Tesla purchased through Vroom because her temporary tag expired April 29.

"As we were nearing that date," Joseph-Kouri told us "we called them, contacted them as we were told to, to get an extension on our tag and we were given the runaround from call number one. Just different answers."

This is a widely documented problem with Vroom and a new lawsuit from the Texas Attorney General explains a reason behind it.

The company is buying and selling vehicles so quickly Vroom often doesn't have a clear title before they sell a vehicle and they're not telling customers that.

Vroom also advertises a rigorous inspection process, but in the lawsuit one customer got her car and said it smelled like being near a boat. She took it to a mechanic who quickly identified flood damage.

Vroom took the car back, but the customer says it was immediately re-listed on Vroom's website without any disclaimer about the flood damage.

There's a bunch of similar complaints about unreported damage, missing features and deceptive financing practices.

"I mean, this company something needs to change." Joseph-Kouri said.

She wants her title and registration, but she's had it with Vroom and would gladly send her car back to them for a refund.

"You know, I don't even want it anymore," she said.

Vroom did not respond to our request for comment on the lawsuit.