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.”