Dealers, does your vehicle acquisition strategy include titling?

I can probably answer that. For most dealers, the answer is no.

They still view title and registration as a back office, cost center. Not all do though, the same dealer groups that are killing the vehicle acquisition game and sucking up all the trade ins, are the same groups that view title and registration as an integral piece of their vehicle acquisition strategy.

Let’s breakdown why that is. First let’s start with the problem with the “status quo.”

—Humans: Most dealers have a used car manager or sales and finance making judgment calls on the trade-in. Some pay more attention than others, but it is a very loose process, or not a process at all

—Compliance (and humans): Even if you have a great sales or finance manager that takes the time to run a vehicle record, the amount of information they need to analyze and catch, can be a lot. So many times, things fall through the cracks.

Here is a short list of what they need to look for:

Does the person trading it in own it?

Is there a co-owner?

What is the relationship? It sets signature requirements.

Is there an active lien, and who holds it?

Any stops, blocks, or holds on title or registration?

Any penalties on the registration?

Is the registration current or expired?

Is the title branded?

Has the vehicle been reported stolen?

Has the title been washed?

Any unusual recent title activity?

Is this the most recent title?

Data: Most dealers think they can run a vehicle history report, see that it’s clean and take that as a green light. Here is the problem with that. The data in most vehicle history reports show you just that “the history”, not what the state has on file at the moment of trade in. So what your relying on is incomplete title and lien data that can be 30, 60, 90 days old.

Timing: Most of these dealers rely on their title department to clean up the mess, but the damage is done, the customer has already left. Most title departments I work with are amazing, but they aren’t miracle workers.

So let’s sum that up.

Most dealers do not include titling when taking in a trade. They have a very loose, subjective process. They are relying on stale incomplete data to make these judgment calls, and they expect the title department to piece everything together.

That is the reality of most dealers. Then they are surprised when they get burnt on a hidden lien, or when they can’t retail the vehicle because there are stops or blocks preventing it from getting titled, or when they have to chase down a co-buyer because they missed it.

How you do anything is how you do everything. Dealers that have a loose process feel it in their margin.

Areas of significant impact

I wanted to highlight what the downstream effects are when a dealer has a broken (or non-existent) process and what more advanced dealers are doing about it.

Here is a short list of what happens when you do not implement a title verification process on the front end:

—Chasing prior lienholders for payoffs and releases

—Buyers on temp tags who can’t register

—Lender lien perfection deadlines at risk

—Deals stalled in queue, backing up F&I and accounting

—Units that can’t be retailed, wholesaled, or floorplanned

—Open titles approaching the state’s legal window

—Unwinds and re-trades that create rework across departments

—Customers who have stopped cooperating

—Poor customer experience

This touches almost every aspect of the dealer ecosystem:

—The dealership

—The retail buyer

—The retail Lender

—The trade in seller

—Floorplan lender

—Auction

You can do everything else right in the sale, you spend millions on advertisement and the latest tech the front end has to offer, but when it comes to title and registration, your dealership is like “nah, we don’t need to worry about that, Mary in the back office will figure it out”…..that is your strategy?

This is just a weakness that other retailers are benefiting from.

Working with dealers over the past 17 years, specifically in the title and registration space, you get to pick up best practices and see trends that the most successful dealer groups are implementing.

Improving processes

Now, I want to lay out what modern dealers are doing today to create a better trade in process when it comes to titling:

  1. This is the most critical piece to all of this. They have built a philosophy and culture where catching title and lien issues up front is critical to their operations. They don’t view this as a back office cost center issue
  2. They verify the title and registration data directly from the state, in real time. They dont rely on outdated historical vehicle history reports alone. Those serve a purpose, but you need to verify directly with the source of record.
  3. Tops down. This is not optional, or left up to a sales manager on if he/she feels like running the report on a busy saturday afternoon. This is a tops down mandated process
  4. Automation. Wherever possible, they automate these lien and title checks up front. This requires working with a vendor (like YASSI) that offers a modern resftul API.
  5. They set rules depending on what they are willign to take in based on the current title and lien status.
  6. They have workflows designed to triage issues up front. They don’t pull records just to throw it in the deal jacket and call it a day. Depending on the results, they have processes in place to handle the scenario
  7. The entire staff understands the importance, the risks and the harm this causes the dealership and the customer experience if not handled correctly. (see previous posts)

So what is the end result of implementing a nationwide title and lien check at the point of sale for these dealers?

Here is a short list that these dealers receive by implementing this process:

—More accurate offers: Catch branded, washed, or stolen titles before you buy a unit you can’t retail.

—Fewer stalled deals: Know who must sign and clear holds and penalties up front, so deals don’t back up in titling and accounting.

—Faster title turns: Clean units retail, wholesale, and floorplan faster, with less carrying cost and no missed legal deadlines.

—Happier customers: Fewer temp-tag buyers and fewer unwinds, and you fix problems while the customer is still engaged.

—Lender confidence: Lien perfection deadlines are easier to hit, which cuts chargeback and repurchase risk.

—Fraud protection: Verify ownership and theft status before you take the trade.

Lee Perine is co-founder and vice president of partnerships at YASSI, where he works directly with dealers, remarketers, and automotive lenders navigating the complexities of title and lien verification across the vehicle lifecycle. He brings more than a decade of experience in government vehicle data systems, giving him a ground-level understanding of where verification breaks down, what it costs dealers at the transaction level, and why the remarketing chain is only as strong as the data behind it.