January 13, 2024

Defining Online Vehicle Titles: Digital vs. Electronic   

After years of relying on outdated methods to process vehicle titles, consumers are looking for a better way to manage their assets. Two decades into the existence of electronic titles, the automotive landscape is experiencing a shift towards digital titles, redefining the parameters of ownership and management. Let’s look at the differences between electronic titles and digital titles, and why it’s an important distinction.  

Electronic Titles 

Electronic titles, essentially electronic versions of traditional paper titles, have been around for roughly two decades and their contribution to the auto industry has been largely limited. To understand how electronic titles stack up against digital titles, call to mind an airline boarding pass. The added functionalities of a digital boarding pass – from tracking bags to preordering meals - far surpasses an electronic pass without tangible functionalities. Similarly, when you have an electronic title, you can only view it, save it, or print it.  

Electronic titles, while available in roughly 27 states, fall short in offering the dynamic features and functions that modern vehicle owners and dealers demand today. Shane Bigelow, CEO of Champ Titles, underscores their limitations: "The titling space has been at a standstill for decades. There's been no enhancements to it beyond the electronic title being an asset that people could reference but not do anything with." 

Digital Titles 

In stark contrast, the emergence of digital titles has shifted how we interact with vehicle ownership. Much like a digital boarding pass offers multiple functionalities beyond a traditional paper pass, a digital title offers possibilities such as selling a title, trading it fractionally, borrowing against it, owning it, and even insuring the title.  

The key difference lies in the enhanced capabilities tied to state DMV systems. This connectivity enables a seamless and feature-rich experience for title holders. A digital title includes every possible feature and function related to a vehicle title.  

Bigelow, reflecting on the transformative potential of digital titles, notes: "The newsworthy thing here is that this has brought forward a new technology into this space that empowers the consumers to do more with something they already own. It’s not just the consumers – now the dealers can do it too." 

Empowering Consumers and Dealers Alike 

Digital titles allow dealers to manage their inventory digitally, eliminating the need for laborious, manual matching of titles with vehicles on the lot. The streamlined process, coupled with the integration of GPS tracking, represents a significant leap forward for the industry. 

"In our case, the database can verify the asset is indeed owned by the dealer, and with GPS trackers already in use, there are substantial benefits not just for consumers but for dealers too," notes Bigelow, highlighting the efficiency and convenience digital titles bring to the automotive industry. 

Digital titling enhances ownership experiences for consumers, streamlines processes for lenders, and brings unprecedented efficiency to dealers. The West Virginia National Digital Titling Clearinghouse is a prime example of the newfound efficiency in processing titles digitally. Titles are processed in less than a day with the Clearinghouse, and productivity skyrocketed with 20 times more tasks being completed per day, per employee, at the West Virginia Department of Motor Vehicles.  

The Road Ahead 

The newfound efficiency showcased by the West Virginia National Digital Titling Clearinghouse proves that any state DMV could benefit from implementing these consumer-driven products. Beyond the reduction in processing time, the integration of GPS tracking and streamlined digital inventory management heralds in a new era for dealers as well, offering unprecedented convenience and efficiency. 

As the automotive industry embraces this technological leap, the road ahead promises not just smoother transactions but a redefined relationship between owners, dealers, and their vehicles. 

Learn more about the digital titling capabilities offered to automotive retailers by the National Digital Titling Clearinghouse here.  

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