The Importance of Electronic Titling

Electronic titling has been an industry goal for many years but a range of regulation and technology hurdles have made it impractical. Advancements on all fronts now enable us to address modern needs and support all stakeholders.

History – 1990 to Today 

The concept of eliminating paper processes used in vehicle titling in favor of electronic record exchange has been a focus for motor vehicle agencies (MVAs) since the early 1990s. Electronic tools have since been created to address specific interactions between MVAs and various stakeholders. For example:

  • Electronic Lien & Title Systems: For the interaction between MVAs and lien holders, some jurisdictions implemented various forms of an Electronic Lien and Title System (ELT). An ELT system provides an electronic means of updating lien information on titles between the jurisdiction’s MVA and the lienholder. Jurisdictions have implemented ELT systems using custom-built technologies while others have leveraged third-party vendors to provide ELT services within their jurisdictions. An ELT system may not facilitate an electronic transfer of ownership but they are an important component of the overall e-titling solution. Learn more about ELT. 
     
  • Electronic Registration & Titling and Electronic Vehicle Registration Systems: These systems allow for more efficient interaction between MVAs and dealers or other third-party agents who complete title or registration paper transactions. These systems, referred to as electronic registration and titling (ERT) or electronic vehicle registration (EVR) may be either an in-house or third-party vendor provided system in which the dealer or agent processes the transaction online. These systems often require the supporting paperwork to be submitted to the MVA. Again, an EVR or ERT system may not facilitate an electronic transfer of ownership but they are an important component of the overall e-titling solution.
     
  • National Motor Vehicle Title Information System: Jurisdictions have implemented the National Motor Vehicle Title Information System (NMVTIS) to reliably verify the information on the paper title with the electronic data from the jurisdiction that issued the title. 

AAMVA has established working groups in the past 15 years, bringing together jurisdictions, federal agencies, and private sector stakeholders to develop guidelines and a plan for moving forward with electronic vehicle titling and vehicle records management. 

In October 2019, the National Highway Traffic Safety Administration issued the final rule on Odometer Disclosure Requirements and this removed the final roadblock to moving forward (see also AAMVA's Odometer Rule Disclosure Exemption Change Whitepaper). AAMVA is now engaged in a pilot project and a variety of collaborations to develop standards, tools, and guidelines for the development and enhancement of electronic titling processes.  

Paper Titles Are Not Meeting Modern Needs

Paper titles are based on the idea of a paper-based filing system which has been long outdated by modern MVA computer systems. They have a range of shortcomings including:

  • Are susceptible to counterfeiting, alterations, and many other forms of fraud
  • Duplicate and replacement titles can be legally obtained
  • Real title stock can be stolen
  • Owner identity on paper may be difficult to authenticate
  • Data entry and processing errors can cause brands to be dropped and other errors

Many Opportunities for Fraud

  • Used to obtain fraudulent loans
  • Used to conduct fraudulent sales
  • Used to perform fraudulent transactions

Not Efficient

  • Need to be updated and reprinted for many functions
  • Difficult to verify by stakeholders and consumers
  • Difficult to manage and inventory by stakeholders
  • Dealer assignments and ownership transfers typically have delayed updates to the MVA
  • Paper may be easily be lost or misplaced
  • Paper record designed for wet signatures and in-person identity/signature verification
  • Paper titles are a snapshot in time, can be easily outdated