The Commonwealth of Pennsylvania became the first state in the nation to make use of electronic lien and title, or ELT, by vehicle lien holders mandatory. The Pennsylvania legislation, known as House Bill 804, became law July 10, 2006. The Act: requires compliance within two years from the date of signing. By July 10, 2008, all lien holders must use the ELT system in Pennsylvania. ELT is also known as a "paperless title" or e-Title.
An electronic lien replaces the traditional paper title with an electronic stream of data. In lieu of mailing thousands of paper titles, (and paying postage for each title), a DM V electronically issues tiles of data to lien holders who have a lien on a vehicle. ELT technology allows vehicle titles and lien information to be maintained, corrected, and transmitted electronically, much like an electronic stock certificate, to and from state motor vehicle agencies and lien holders, such as fleet management companies. 'The ELT programs in operation today are tested, secure, and stable," said VIN-tek COO Larry Highbloom, a key player in drafting the Pennsylvania legislation. Highbloom worked closely with the Pennsylvania House of Representatives, State Senate, and Pennsylvania Department of Transportation to help draft House Bill 804. From 1997-2002, VIN-tek provided data exchange services for Pennsylvania's voluntary ELT program as its ELF vendor.
DMVs started offering ELT in the late 1980s to offset DMV and lien holder processing costs. Today, 12 stales offer ELT programs. However, until the Pennsylvania legislation, use of electronic title was optional to the lien holder. Stales offering voluntary ELT programs are Arizona, California, Florida, Hawaii, Idaho, Kansas, New York, Massachusetts, Ohio, Virginia, and Washington. These states, along with Pennsylvania, account for 48 percent of all vehicle registration volume in the U.S. Between now and 2008, six additional stales are anticipated to permit the use of electronic vehicle titles. They are Georgia, Maryland, New Hampshire, Nevada, South Carolina, and Tennessee. With these additional states, roughly 65 percent of all vehicle registrations in the U.S. will occur in ELT-enabled slates.
For lien holders participating in a voluntary ELT system, a stale suppresses the printing of a physical paper title. Instead of receiving by mail a paper title to store in its title vault, the lien holder, such as a fleet lessor, receives an electronic transaction stating its financial interest in the vehicle. The "storage" of the title is electronic. Upon release of the lien, the DMV mails a paper title to the recipient designated by the releasing lien holder. Virginia has begun designing a completely paperless title system where Ihe lien, transfer of ownership, and title itself are paperless. Electronic titles oiler a way to eliminate lost paper titles. With an e-Title, vehicle lilies are never lost and are immediately accessible. For fleet management companies, title administration cost is reduced. "There is a 75-pereenl cost savings in title administration with e-Titles compared to paper titles," said Highbloom. "It accelerates the sale of returned vehicles, which reduces depreciation expense and funding costs of inventory."
In addition to cost savings, an electronic title reduces fraud by eliminating a document, which could easily be stolen or misused by a third party. In ELT processing, only the lien holder of record can perform transactions on an ELT record while the lien is still active. There isn't any paper floating around for someone to manipulate. For auctions, the use of e-Titles speeds the sale of consigned Heel units. It provides "just-in- time" title availability that lowers title-processing costs. Another benefit of electronic titles is the reduced opportunity for odometer fraud since there is no paper title to be altered. One concern about e-Titles has been delays encountered in converting them to paper titles for use in states that do not have an ELT system. However, this is changing. Four states - Florida, Pennsylvania, Ohio, and Arizona - utilize or arc currently developing a "fast e-Title to paper" process, which allows the printing of paper titles at auctions or by tag agents.