Class Action Alleges Vroom Fails to Obtain Clear Title Before Selling Used Cars

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Vroom faces a proposed class action in which an Oklahoma driver alleges the fast-growing online used vehicle broker has failed to manage its rapid growth effectively and, in the process, violated car buyers’ rights nationwide. 

The 18-page lawsuit alleges that Vroom, who saw explosive growth during the pandemic, has misrepresented that it has obtained a clear title before selling vehicles and failed to disclose both “systemic delays” in title and registration processing and higher insurance premium requirements for non-Texas consumers. 

Although Vroom represents that its online “no haggle, no pressure” vehicle-buying process will be a relative breeze for consumers in the market for a used car, the company nevertheless fails to timely transfer title to many buyers, the case alleges. Per the suit, Vroom delivers vehicles with 60-day temporary tags issued by the DMV in Texas, creating a 60-day window in which to timely transfer title and registration. In Oklahoma, however, drivers are required to register and title a car within 30 days of purchase, the suit says. 

The complaint credits Vroom’s pandemic-era growth to “cutting corners to realize those gains,” and alleges the company turns over customer-sourced vehicles so quickly that it resells cars before it even obtains a clear title. In doing so, the suit says, Vroom misrepresents ownership of the vehicles listed for sale on its website. 

According to the lawsuit, some used car buyers have been forced to return their vehicles due to the fact that Vroom never obtained a clear title. Others, as a result of Vroom’s failure to timely register the change in a vehicle’s ownership, have been left with expired temporary tags and no evidence that they own the car, the case says.

“Defendants are not disclosing that the sale is subject to their ability to obtain clear title to the offered vehicle,” the filing states. “Despite receiving numerous complaints from buyers, Defendants have informed purchasers, who had been hopelessly waiting months for title and registration, that they must return the vehicles because Defendants do not have clear title.”

The lawsuit contends that because Vroom has misled consumers about its ability to comply with state legal requirements for the timely transfer of title and registration, it’s all but guaranteed that consumers “do not understand that they are purchasing a good that they will not be able to prove they own.” Per the case, some consumers have reported waiting as long as a year to receive the title to their purchased vehicle, and sometimes even longer. 

The suit looks to represent all Oklahoma residents who bought a vehicle from Vroom.com at any time between July 22, 2017 and June 22, 2022 and failed to receive from Vroom the car’s legal title within 30 days from the date of delivery.

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