Today, about 35 percent of all vehicles at auction are sold without the physical presence of a title, according to research conducted by Manheim Auction. When broken out by seller type, over 90 percent of all commercial sales are conducted with a title, while only 42.3 percent of dealer sales are. Typically, the delayed title will arrive within about a week, but without a title, the dealer can’t retail the car on their lot. The longer the title delay, the longer the dealer must hold the car and endure the hassle of tied-up money. In about 10 percent of cases, titles are delayed by a month or more, with dealers paying an average of about $32 a day in holding costs.
Having a title present on sale day leads to dramatically increased conversion rates, according to Manheim’s research. Typical dealer conversion is 50 to 55 percent. While titles may not be the only driving factor, the average conversion for dealer vehicles with a title present is 86.2 percent as opposed to conversion for delayed title vehicles at 42 percent. Simply put, having a vehicle’s title in hand can make a difference in whether the dealer wins, loses or draws on a piece of inventory.
To help both dealers and lenders take advantage of this trend, lender software solutions provider Dealertrack recently announced its Accelerated Title solution to create cost savings through faster, electronic payments to lenders, which enables title release to dealers as quickly as four to six days, significantly speeding the standard payoff and title release process by up to 70 percent.
“Identifying profit opportunities for dealers and lenders through our network continues to be top-of-mind for Dealertrack,” said Todd Hutto, VP and General Manager for Lender DDS/CMS Solutions at Dealertrack. “We’ve seen titled vehicles sell at a faster clip in our current environment, creating a clear opportunity for dealers looking to move inventory faster, ultimately reducing holding costs to boost profitability.”
According to Dealertrack, its lender network now can support approximately one in every four title trade-in transactions with an outstanding loan in the U.S. Its new Accelerated Title feature is capable of streamlining the vehicle payoff process, creating cost savings and faster title release to dealers through four modules:
Payoff Quotes receives requests directly through Dealertrack and provides a precise payoff amount to dealers; Electronic Funding expedites the delivery of funds to within four to six days (with ACH processing); Status Tracking and Summary Reports provide dealers with direct access to track titles and review statements and transactions.