What is an Electronic Car Title?
An electronic car title is a digital version of a regular paper car title stored by the state DMV in an effort to save paper, reduce physical storage and risk of loss, and make obtaining a new title easier for car owners.
Certain states use electronic car titles when the owner prefers to keep the title in a database instead of in paper format. The e-title includes all the usual title information and allows for secure transmission between the seller and the state. At the time of this article, in most states a digital car title can be converted to a paper title at any time by your local DMV.
E-titles can be issued by dealerships or the DMV
With an e-title, the DMV holds the electronic ownership form in their system on the owner’s behalf. Instead of sending the paper certificate of title, access is given in electronic form. The DMV or state entity handles all the title information and holds the paper certificate until the customer requests the paper title instead.
Sometimes, the vehicle owner requests an e-title from the DMV, while other times one is set up through the dealership where the car is purchased.
Electronic titles make things easy
Through the use of an electronic title, there is support for:
Electronic lien releases
Digital lien notifications
Reduction of storage space and risk of loss
While most states will soon be on-board with this way of processing titles, at the time of this writing 20 states are currently processing e-titles. These states are Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Kansas, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington, and Wisconsin. (If this is no longer current please let us know.)
Benefits of Moving to Digital Car Titles
There are some clear advantages to having electronic car titling. They include:
Less expense thanks to lack of handling, storage, and postage
Lower administrative burden for filing and processing
Streamlines processing of title-related paperwork
Reduces overall use of paper
Eliminates risk of losing the title
Drawbacks of an Electronic Car Title
With that said, there are some disadvantages to e-titles as well. These include:
It often takes time to convert an e-title to a paper title, which is still sometimes needed
In some states, receiving a new title after an electronic lien release can still take months
Some states offer expedited printing services, but the cost is higher
An electronic title will still appear on a VIN check along with information about the car’s salvage history, theft history, and maintenance and repairs.
How Does an Electronic Title Work With a Lienholder?
In participating states, lenders can become an electronic title lienholder with an e-title. Instead of keeping a physical copy of the customer’s vehicle title, the lender has now been granted access to the electronic version of the car title through the DMV. The lien holder is held to the same legal requirements as if the title were physical in nature.
Once the lien is satisfied, the lienholder simply files paperwork with the state so the customer can receive their paper title – often this is done electronically, yet another benefit of digital car titles. When releasing the lien, all details are entered into the state’s system and changes are dealt with appropriately.
A digital car title system benefits the lienholder in several ways. First, it helps them to reduce staffing costs because they don’t need to file, retrieve or mail title certificates. There is also less storage space required on premises because of the lack of paper filing. Finally, processing transactions are faster and simpler because everything is handled through the computer system. This also lessens the chance of title-related fraud stemming from use, theft, or loss of paper car titles.
If you have an e-title with a lienholder involved, they must confirm the loan has been satisfied before the DMV will release your car title. You cannot walk into your local DMV with a letter from the lender and request a title; that simply won’t work. The lender will complete the lien release process online, and that process may take some time.
How Do You Sell a Car with an Electronic Title?
You always have the option to sell your car, but there is often extra effort required when you have an e-title. If you sell or trade your car to a dealership, they will usually handle the electronic title transfer without a problem through access granted to them by the DMV.
If you plan to sell your car privately, at this time you will need to first convert your electronic title to a paper title – but maybe one day that too will change.
How do you convert an electronic title to a paper title?
Your local DMV can convert your car’s e-title to a conventional paper title. To prepare for an upcoming sale, you’ll want to request this from the DMV well in advance. It’s important to note that many states don’t allow you to convert your title back into the electronic format once you’ve requested the traditional version. If you decide not to sell the car, you will have to keep the paper title on file.
If you have an e-title with a lienholder involved, they must confirm the loan has been satisfied before the DMV will release your car title. You cannot walk into your local DMV with a letter from the lender and request a title; that simply won’t work. The lender will complete the lien release process online, and that process may take some time.
Before making plans to sell your car again, consult with your DMV or lender to find out what their turnaround time is for e-titles. Many states have laws about how long the lienholder has to process your lien release, but there’s no guarantee that they will stop what they’re doing to file your request. It might take days or even weeks to get your title based on your state’s workload at the time.
How Do You Buy a Car with an E-Title?
While each state has different rules on transferring digital titles, most states still require you to sell your car with a conventional paper title. Some states allow you to buy a car with an e-title and have it digitally transferred to your name, but that isn’t generally the case. Check your state’s DMV website to confirm.
When buying a car with an e-title, ask the seller about the title history. Look at the paper title and make sure that everything adds up before you buy the car. After you buy the car, you can have the title converted to an e-title if your state supports that practice.
If you’re in doubt, you can confirm the title status of a vehicle you intend to purchase using a VIN check.
Car Titles are Entering the Digital Age
As the world goes digital, expect to see more states incorporating electronic car titles in the near future. It’s a convenient way to increase security, reduce fraud, and help prevent titles from ever getting lost. Furthermore, it makes it easier for lenders to deal with liens while reducing their manpower and it should make filing most title-related paperwork much easier.
Truly the only downside to e-titles at this time is how long it can take to get a paper copy when you want one. As technology continues to progress, we imagine this wait time will continue to decrease as the queue of work at the DMV is reduced by the benefits of digital car titles.
What about you? Do you prefer to keep a paper title on file, or do you like the convenience of keeping it electronically stored? Tell us in the comments!
If you need a new title for your vehicle, let us do the work for you. We can obtain a new title and registration for cars, motorcycles, and almost anything with wheels. We also offer VIN Checks to help you gather the facts before buying a new car. Click the links to learn more about our services.
