2020 was all about digital transformation for dealers, lenders, and state DMVs as a global pandemic forced offices to close, workers to stay at home, and businesses to rethink how they could keep up with consumer demands. The great acceleration of digital adoption was not only evident, but necessary for business continuity. Early on in 2021, it’s clear that the digital business model is here to stay for the long-term.
Modernization never ends and staying ahead of the curve will be the name of the game.
When COVID-19 hit the U.S., dealers, lenders, and state DMVs quickly realized they needed to create a safe and customer-focused digital process. This provided the opportunity for a quicker pivot to modern, digital tools than previously planned. Substantial technological changes occurred across processes including finance options, funding, remote delivery, compliance, and registration and title, ultimately driving efficiencies from the front to the back of the office. By creating an environment for digital transactions, the industry was able to offer a way to quickly and efficiently address customers’ registration and titling needs for in-state and out-of-state customers alike. An online presence provides dealers with a competitive advantage by enabling them to create new relationships with cross-border customers as they work with state DMVs to continue to expand the services and offerings online.
Today, technology provides certainty in uncertain times. Since the start of COVID-19, up to 75% of franchise dealers have adopted some form of digital retailing to better serve their customers' needs. And this change is by no means temporary. In fact, the Cox Automotive COVID-19 Consumer Impact Study reported that two out of three buyers would prefer to complete 100% of the buying process online. This opens the door to a broader consumer base who increasingly have access to dealerships across the country at the click of a button. This means increased potential for out-of-state sales.
However, without the right technology in place, out-of-state deals can quickly become a time-consuming and costly process for dealerships. According to Cox Automotive internal data, there are 51 unique DMV jurisdictions, 100 distinct sets of taxes and fees, 250 unique forms, and 300 possible registration and title transactions. Electronic registration and titling solutions can help dealerships eliminate the uncertainty that can come with navigating out-of-state rules and requirements, saving time and allowing salespeople to provide exceptional customer service. By leveraging technology to provide checklists and state-specific knowledge that streamline processes between the front and back office, dealerships can use data-driven insights to determine from where most out-of-state sales are coming and address customers registration and titling needs in advance.
State DMVs that adopted electronic solutions before COVID-19, experienced the value of having electronic solutions and benefited from the substantial changes they had made to their DMV standard operating procedures. According to Richard Holcomb, commissioner of Virginia Department of Motor Vehicles, “COVID-19 challenged DMVs nationwide to alter service models to continue safely serving customers. However, in Virginia, long-term program initiatives such as electronic registration and electronic liens ensured that our dealer and lender partners could get the motor vehicle services they needed to sell vehicles and issue liens and leases for customers and businesses who relied on these services during the pandemic. The programs have paid off in many ways.”
With more than 30 states electronic registration and title enabled and 24 electronic lien and title enabled in 2020, dealers could submit completed transactions to the DMV to finalize out-of-state or in-state deals electronically. This digital expansion will continue to increase as these technology solutions are helping DMVs registration and titling processes to continue despite closures due to COVID-19 and growing uncertainty.
As we navigate 2021, it is clear that digitization is here to stay. And while COVID-19 sparked a digital acceleration, all signs point to 2021 being the year of great digital expansion to deliver even greater efficiency, faster deals, and happier customers. Modernization never ends and staying ahead of the curve will be the name of the game.
Kait Gavin is vice president of operations at Dealertrack Registration and Title Solutions.