NORTH HILLS, N.Y. and WESTCHESTER, Ill. – The General Assembly of North Carolina has amended its laws governing the title transfer of salvage vehicles by removing notary requirements, permitting electronic signatures and allowing access to division of motor vehicle systems. Prompted by the global health crisis, the amendment, due to be signed into law in mid-July, marks a new milestone in that half of the states in the U.S. would officially be eligible to transfer total loss titles digitally.
Enabling the process to work digitally speeds up the flow of value from one party to the next, which in turn benefits the entire auto eco-system.
“With the passage of HB 337 (Regular Session 2019), North Carolina became the 25th state to enable electronic salvage title processing,” said Sarah Hunsicker, Director of Government Affairs for Dealertrack Registration and Title Solutions. “Additionally, North Carolina has taken further steps to streamline the transfer of a total loss vehicle, including permitting electronic signatures and eliminating notarization requirements.”
Even before the coronavirus pandemic forced many dealerships, DMVs and auctions to operate with fewer staff and social distancing, total loss title processing could take 8-10 weeks. The delay to transfer ownership of a total loss vehicle stalls cash flow for insurance companies, dealers and other downstream players who derive value from fixing, parting out or recycling salvaged vehicles.
The new law paves the way for digital processing of total loss titles in North Carolina, which can now be done via an enhanced strategic agreement between IAA, Inc. (NYSE: IAA) and Dealertrack Registration and Title Solutions. IAA is a leading global marketplace connecting vehicle buyers and sellers. Dealertrack’s Registration and Title Solutions expedite back office workflow and improve deal efficiency. The companies’ combined technologies allow for the transfer of information between the parties necessary to the total loss title transfer, which can cut the timeframe down to as little as one week and free up crucial cash flow. IAA’s Loan Payoff™ allows insurance companies and automotive lenders to digitally connect to address negative equity liens. It then issues a letter of guarantee, resulting in accelerating the total loss settlement and lien payoff process.
“When a total loss occurs, generally the consumer is made whole at the beginning of the claims process on the value of the vehicle,” explained, Tim O’Day, president of U.S. operations for IAA. “The creation of value and healthy revenue from that asset then falls on insurance companies, dealerships and a whole eco-system of affiliated businesses. Enabling the process to work digitally speeds up the flow of value from one party to the next, which in turn benefits the entire auto eco-system.”
In a vehicle claim, moving the title faster decreases the cycle time to sell a total loss vehicle, which means better value to the involved parties, and can translate to more stable insurance premiums to consumers.
Based on internal analysis and interactions with multiple insurance providers, IAA estimates that there are more than five million cars declared a total loss each year and approximately 60 to 70 percent of those vehicles have loans which require payoff prior to the clear transfer of title.1 Based on the average price for cars declared total losses, delays in the loan payoff and title transfer processes can tie up billions of dollars and slow consumers from returning to the auto retail market to purchase their next vehicle.
“If there is a silver lining to be found for our industry during the upheaval caused by the national health crisis, it has been the spur to digital adoption,” said Kaitlin Gavin, vice president of operations, Dealertrack Registration and Title Solutions. “We’ve progressed years in terms of applying available technology to total loss titling in just weeks’ time.”
Originally posted on F&I and Showroom