The Nationwide Titling and Registration Dilemma: Shopping for a Solution
DMV Nationwide.com... 50 States, 1 Solution
Today's consumers are changing how they shop for motor vehicles. The traditional sales model for a dealership has been based on local walk‐in business derived from expensive local advertising. Now, nearly all potential customers start their purchase decisions on the internet, due to a combination of factors including technology, shrinking inventories, reduced purchase points, and the overall transient nature of our society. As a result, traditional business practices must be reassessed to include services that cater to an ever-expanding nationwide customer base, not just a few surrounding zip codes.
A national customer base presents a new challenge: how to title and register a vehicle in another state?
"Dealers often think out-of-state customers are a burden, and rightfully so," said Marlon Carias, CEO of DMVnationwide.com. "Out-of-state deals present significant issues and challenges that cost time and money, often result in a loss of profit from uncollected funds, and yet are hard to quantify exactly how much. A lack of knowledge regarding interstate commerce can pose new risks and liabilities that a dealership needs to be prepared for."
When searching for the right solution for your dealership, DMVnationwide.com suggests knowing the right questions to ask a potential vendor is key to finding the solution that matches your dealership’s needs. Here are some things to consider before hiring an out-of-state titling and registration company:
Does the product offer a web-based solution that is accessible to all users via the internet?
The internet is open 24/7… the DMV is not. Therefore, access to any information regarding the titling and registration of a customer’s vehicle ends at 5pm. A web-based solution is critical to this process. A dealership needs information for a customer outside of "normal business hours," or they risk their customer going down the street or hopping on their laptop to find a better deal. Consumers have unlimited access to information and so should the dealer.
Can the product calculate reciprocal tax, title, and registration fees at the point of sale for all 50 states so those dollars can be captured correctly and compliantly?
Reciprocal tax agreements between states are a legal obligation for a dealer. Once the customer pays their taxes and signs the buyer's order, it is the dealer's responsibility to disperse tax money accordingly. It is a natural assumption that a dealer pays their state’s sales tax on vehicles sold off their lot. This is not the case according to interstate commerce laws in which each state has its own law regarding tax collection. Similarly, laws regarding title and registration fees are managed by state and county governments.
Reciprocal agreements can also be very specific. Did you know that for customers from Massachusetts, you can only give tax credit for a trade-in if the dealership that is selling the vehicle is registered with the Massachusetts Department of Revenue? Let’s assume you are selling a $40,000 vehicle with a $10,000 trade in at a tax rate of 6%: you could potentially be losing $600.00 of dealer profit on one deal, or far worse, the entire sale for not knowing that one rule!
Will all inspection information be explained clearly?
In California, a Smog inspection is required 20 days after the sale of the motor vehicle and must be completed before a license plate is issued. Your title department finds this information out once they get the deal from F&I six days later. After four days of trying to get a hold of your customer, they call you back only to inform you they will not be back in California for another 30 days. By the time the customer is back to their state, the deal will have already accrued late penalties. Do you, the dealer, pay the penalty on your customer’s behalf, or give the customer a COD? (So long, CSI score…)
How easily can the product be incorporated into the dealer process?
Your out-of-state vendor should offer a processing center that handles the paperwork, which will save your title department from having to learn how to process another state’s complicated applications. The product should be user-friendly and accessible to all staff and departments that have interest in the sale.
Even with the aforementioned characteristics, there is no guarantee you will never have a "problem customer." Heck, even Amazon.com gets an irate customer on occasion. But, it is important to know that there are solutions to help keep up with our tech-savvy generation, and every out-of state deal should not have to be a headache.
A great source of references for nationwide title and registration companies can be found at your dealer or trade association, your local tax collector, and most importantly, your local dealer friends.