IAA & Dealertrack broaden strategic agreement into Ohio
IAA announced another enhanced strategic agreement with Dealertrack to provide electronic registration and titling services
About a year ago, these companies said these services became available in North Carolina. This week, the availability arrived in Ohio to facilitate the digital transfer of total loss titles.
IAA and Dealertrack highlighted that this new agreement came together as the global COVID-19 health crisis continues the acceleration of digitization efforts across the automotive industry, which faces yet another challenging year ahead due to the ongoing impacts of inventory shortages.
The companies emphasized these digital capabilities will be essential for dealerships to meet consumer expectations of completing more of the shopping experience online, as more than three quarters of today’s shoppers are open to the idea of buying a vehicle completely online, according to the 2020 Cox Automotive Digitization of End-to-End Retail Study.
The enhanced capabilities offered by IAA and Dealertrack will connect consumers, dealerships, and insurers in Ohio for a more efficient, more profitable electronic total loss title processing experience.
IAA and Dealertrack pointed out that the pandemic changed longstanding industry dynamics in several unforeseen ways. In particular, the total loss segment of the market has been affected by the circumstances of the last year.
According to industry data gathered by CCC, overall traffic volume decreased by 14% in 2020, with passenger interstate travel dropping more than 50% in mid-April alone.
Even with drivers traveling fewer miles and submitting fewer overall claims, the CCC information indicated accident severity levels rose due to drivers increasing their median speeds. The firm’s data found that the percentage of vehicle claims that were non-drivable and flagged as total losses rose over the previous two years.
CCC went on to mention repair costs also trended higher during most of 2020, increasing 4.9% between 2019-2020, compared to 3.6% increases between 2018-2019.
“Higher repair costs in turn are pushing insurance companies to total vehicles that previously would have been restored,” IAA and Dealertrack said in its news release.
These higher costs and totaled vehicle arrive amid a tight used car market due to industry-wide supply constraints caused in part by electronic chip shortages reducing availability of new vehicles that will likely persist in the coming months. However, IAA and Dealertrack mentioned the pace of digital transformation has greatly increased to keep up with this challenging environment.
Prior to the pandemic, the companies said total loss title processing often took eight to 10 weeks. This timeline often caused a delay in transferring ownership of total loss vehicles, which stalled cash flow for insurance companies, dealers and the downstream players who derive value from fixing, parting out or recycling salvaged vehicles.
IAA and Dealertrack said 25 states now offer electronic lien and title solutions (ELT) and 29 allow electronic registration and titling (ERT), including Ohio, which is eligible to transfer total loss titles digitally.
Prior to the collaboration in Ohio, IAA and Dealertrack Registration and Title Solutions announced a strategic agreement in July when North Carolina passed a bill to become the 25th state to offer ELT services.
“Insurance companies need to control costs and cycle time, so there is less of a lag between making the customer whole and moving the vehicle value to the final party,” said Tab Edmundson, vice president of client solutions for IAA. “This IAA and Dealertrack collaboration has the potential to expedite back-office workflow and improve deal efficiency by leaps and bounds.”
More than 5 million vehicles are declared a total loss each year, according to IAA estimates, and up to 70% of those vehicles are connected to financing.
The IAA Loan Payoff solution, which was recently enhanced with Dealertrack Payoff Quote, can reduce the time to secure a vehicle title for a total loss claim by up to 50%, which can result in greatly reduced storage costs and vehicle depreciation.
“We’ve seen more titling legislative activity in the last year than we’ve seen in the last 50 years because many of these laws were written in the 1950’s when digitization wasn’t a consideration,” said Kaitlin Gavin, vice president of operations at Dealertrack Registration and Title Solutions. “The last year catalyzed digital transformation and adoption in many parts of the auto industry including the total loss sector.
“Thanks to strategic agreements like the one between Dealertrack and IAA, technology such as the Ohio electronic titling solution can accelerate the loan payoff and the title release, which not only improves sales velocity, but improves the bottom line for dealerships in Ohio and across the country,” Gavin went on to say.