Vroom pulls the plug on online car sales weeks after settling lawsuit with Texas AG

Vroom ceases sales for its online used car business

HOUSTON - The once top competitor to Carvana has hit the brakes on its online used car business.

Texas-based Vroom announced it's shutting down its online sales operations and laying off nearly 800 employees.

Instead of listing used vehicles on Vroom.com, the company announced: "Vroom has halted all purchases and sales of used vehicles. We are discontinuing Vroom's e-commerce operations and winding down our used vehicle dealership business."

The announcement comes as sales for the company have dropped and legal issues became costly.

In December, Vroom settled a lawsuit filed by the Texas Attorney General's Office for $ 3 million. The lawsuit alleged the Houston-based car company "engaged in deceptive trade practices." Along with the payment, Vroom agreed not to advertise or sell used vehicles without having the vehicle's title.

A Vroom spokesperson told the CBS News Texas I-Team, "The wind-down of our used vehicle dealership operations has no impact on our settlement with the Office of the Attorney General."

The company's CEO, in a statement, said the failure to raise enough capital led to the shutdown of its online business.

Vroom also owns an automotive finance company and an AI analytics company that works with dealerships. Both of those will continue to operate.

The Texas Attorney General's Office filed a lawsuit in 2022 against Vroom just days after I-Team reported on the car company's troubles.

Vroom customers filed over 5,000 complaints with the Better Business Bureau in three years.

"There is no other company in my database that racks up as many complaints as Vroom," Dan Parson, the president of BBB of Metropolitan Houston, told the I-Team in 2022.

Many reported complaints were about paperwork issues and delays with receiving a vehicle's title and registration after purchase.

David Gerda of Keller waited more than seven months after buying a car with Vroom before he received the title.

"We can show we paid for it, but we can't show that we own it because we don't have a title," he told the I-Team in 2022.

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