Dealers Prepare for Electronic Titles

There’s new urgency and recent action to report in the pursuit of fully electronic auto titles – e-titles for short – an effort with roots dating back more than 20 years.

“There are a lot of reasons to feel not much progress has been made,” but that’s starting to change, says Tony Hall, senior manager of government affairs for Tempe, AZ-based online auto retailer Carvana. 

Carvana is a founding member of the new Electronic Secure Title and Registration Transformation Coalition, abbreviated eSTART, founded with 18 members in March.

As of early July, the coalition had grown to 84 members and counting, Hall tells WardsAuto. Members include several state dealer associations, the National Automobile Dealers Assn.,, title and registration service providers, auto lenders and auto auction companies, he says.

Meanwhile, state motor vehicle departments in Indiana, Kentucky, Maine, Nevada, New Jersey, New York and West Virginia all report making progress this year toward at least reducing dependence on paper titles.

Why are electronic titles on the front burner? Two factors have changed the situation: better technology and the COVID-19 pandemic, experts say.

First, better technology can handle a bigger volume of data faster than legacy computer systems at state motor vehicle departments that sometimes date back to the 1980s.

Plus, integration is improving among the different systems used by dealers, customers and a host of related industries, such as banks, auto auctions and insurance companies, according to interviews.

Besides those positives, electronic documents are more accurate and less prone to fraud than their paper counterparts, Shane Bigelow, CEO of technology provider Champ Titles tells WardsAuto. . Cleveland-based Champ is working on electronic title solutions with several state DMVs.

“There’s a lot more fraud in the paper world than in the electronic world,” Bigelow says. Paper titles can be mislaid or stolen, for instance. In states that use custom-printed state DMV card stock to print titles, Bigelow says enterprising fraudsters even steal or forge “official” paper to print phony titles.

Second, the pandemic lit a fire under longstanding efforts to adopt electronic titles because DMVs in much of the country temporarily shut down in-person visits four years ago, experts say.

“During COVID, it was obvious electronic solutions were what was needed,” says Kait Gavin, vice president, operations, titling solutions, for Atlanta-based vendor Cox Automotive.

Shutdowns created an extra-large backlog of title transfers, and experts say suddenly it was easier for state DMVs to make the case for investing in electronic titles,

“It’s been a nightmare” working through the backlog in Nevada, says Chad Leavitt, chief accounting officer for Findlay Automotive Group, Henderson, NV. He says that during the height of the pandemic, an eight-week backlog for title requests was common in the state.

Findlay Automotive has 35 dealerships, including 18 in Nevada. In addition to in-state business, transactions across state lines are fairly common, and those complicate the title process even more, Leavitt says.

Findlay Automotive is in a pilot program the State of Nevada launched in November 2023 in which 21 participating dealerships can submit documents electronically without having to mail in paper documents. The process reduces turnaround time to one or two days, according to a state report.

New Jersey is another example of electronic title leadership. The state Motor Vehicle Commission recently announced  plans to launch an Electronic Lien and Titling system in partnership with Champ Titles and software provider Tyler Technologies of Plano, TX.

Jim Appleton, president of the Trenton-based New Jersey Coalition of Automotive Retailers, which represents more than 500 new-vehicle dealerships, tells WardsAuto the state is trying to reduce the backlog for titles to days, instead of weeks in some cases.

“Talk to any dealer about the ‘pain points’ in getting clean titles and title lien releases and how much that costs them,” Appleton says. “Taking the time it takes to clear titles, from weeks to days, will save even small dealers big money.”

Current high interest rates jack up dealer floorplan costs when transactions are delayed for lack of a title, he says.

Floorplan is the money dealers borrow to finance inventory. The dealer pays it back when the car or truck is sold – but no sale is final until the new owner gets the title. The vast majority of title issues involve used cars, experts say.

Across the country, dealers and other experts say it can take days or weeks, even months, to obtain the required title for a used car. There’s a long list of possible delays, starting with the sheer volume of requests for titles and title transfers, at overworked state DMVs.

There’s added complexity for titles that have a lien on them.

It’s also important to use terms precisely, says Carvana’s Hall. Even in the auto retail space, many people think their state provides electronic titles. They do, “sorta, but not really,” he says. “E-titling barely exists.”

Truly electronic titles mean there’s never a need to resort to a printed document, he says. But such e-titles are rare, and even in the handful of states that offer some variation of e-titles, they are applied only in certain cases, for example, for sales by private owners. And they may not be accepted in other states.

Hall says that when people say “electronic titles,” they often are referring to Electronic Lien and Titles, or Electronic Registration and Titles, which exist in about 30 states. The eSTART coalition also encourages expanding those systems because they reduce the need to transmit and store paper titles.

But those systems don’t necessarily eliminate the need to print out a title at some point in the process. For instance, it can be necessary to print out a title when a title is transferred to a new owner.

An actual e-title includes everything needed to transfer ownership, including a required odometer statement, which is lacking in less-capable electronic systems, Hall says.

Depending on how they’re defined, only a handful of states offer what Hall would call variations of e-titles: Arizona, Texas, West Virginia, Florida, Ohio and Virginia, he says.

Paul Steier, director, vehicle programs, for the American Association of Motor Vehicle Administrators, says the association recognizes that due to budget restrictions and other reasons, most states are limited to taking incremental steps toward true e-titles.

“We all want to see commerce move. We want to see new owners get their vehicles. We want to see the money transferred; we want to see the money get into the local economy,” he says. The standard time to receive a title is two to six weeks, according to multiple sources.

“But if you’ve got to wait three months to get the title, everything comes to a grinding halt.”

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There’s new urgency and recent action to report in the pursuit of fully electronic auto titles – e-t…