What's an Electronic Title? Who Owns It? Where is It?

As technology continues to evolve, every year we’re seeing more innovations in the automotive world. With projections that electric vehicles will be most of what’s on the roadway in years to come, it makes complete sense that states will begin using electronic titles. What exactly are electronic titles? Who has them, and where are they? How do e-titles benefit the average person?

Let’s take a closer look.

What is an Electronic Title?

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.

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 only 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

  • Conversion of existing paper titles

  • Digital lien notifications

While most states will soon be on-board with this way of processing titles, at the time of this writing only 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.

Benefits of an Electronic Title

There are some clear advantages to having electronic car titling. They include:

  • Less expensive thanks to lack of handling, storage, and postage

  • Lowers the administrative burden for filing and processing

  • Improves the accuracy and security of data

  • The title cannot be lost

  • Helps reduce overall use of paper

Drawbacks of an Electronic 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

  • In some states, receiving a paper title after an electronic lien release can take months

  • Some states offer expedited printing services, but the cost is higher

What is an Electronic Title 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 now has 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 paper.

Once the lien is satisfied, the lienholder simply files paperwork with the state so the customer can receive their paper title. When releasing the lien, all details are entered into the state’s system and changes are dealt with appropriately.

This system benefits the lien holder in several ways. First, it helps them to reduce staffing costs because they don’t need to file, retrieve or mail title certificates. There’s also less storage space required on premises because of the lack of paper filing. Finally, processing transactions are more straightforward because everything is handled through the computer system. This also lessens the chance of title-related fraud stemming from use of paper car titles.

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 you car to a dealership, they will usually handle the electronic title transfer without a problem. If you plan to sell your car privately, you will need to first convert your electronic title to a paper title.

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 electronically file your request.

How Do You Buy a Car with an E-Title?

While each state has different rules on this practice, 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.

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.

Final Thoughts

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. 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 well.

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!

Title Gods specializes in recovering lost car titles and solving all kinds of title-related issues. We are not attorneys. This article is not legal advice.

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