Even before the current inventory crunch, dealerships have been promoting their listings beyond their immediate market area to reach as many consumers as possible. Thanks to online shopping, car buyers can locate the exact vehicle they want, and they are increasingly willing to complete those purchases regardless of where the vehicle is located.
2020 Cox Automotive Car Buyer Journey research found that car buyers have been steadily increasing their buying radius over the past three years, nearly doubling it from an average of 45.9 miles in 2018 to 89.3 miles in 2020. So, it’s no surprise that Dealertrack shows an approximately 80 percent increase in out-of-state registration and title transactions over the past five years.
With that in mind, it’s more important than ever for dealerships to be prepared for purchases – and even trade-ins – from customers who live in other states. There’s technology available to help at each step of those processes. Let’s explore how these tools work through a hypothetical out-of-state sales scenario.
Say a dealership in Georgia has a vehicle listed online and a buyer in North Carolina decides he’s willing to drive two states over to get it. This buyer is also planning to trade in his existing vehicle as part of the deal. Here’s how technology can streamline the process:
First, there’s the trade-in. North Carolina isn’t a consumer title holding state and the loan isn’t completely paid off, so the lienholder still has the title. But there’s a potential complication: the customer happened to mention that he doesn’t remember if his estranged ex-spouse is on the title or not. If she isn’t, the trade-in can proceed without incident. If she is, the customer will have to try to get her current contact information — and obtain her permission for the trade.
It’s a desirable trade-in vehicle, which could make many dealerships inclined to just take the gamble and accept the trade without knowing the title status. But if the ex is on the title and refuses to allow the trade, unraveling the trade and possibly the new purchase deal could be costly for both the dealership and the customer.
But this dealership uses a software solution for trade-in titling that eliminates that uncertainty. With the click of a button, they can pull up an image of the title and find out whether or not there’s a co-owner listed. In this case, the car buyer’s worry was unfounded: he’s the only person listed on the title.
The trade-in titling solution also helps the dealership calculate a date-specific, reliable payoff amount from the lender for the customer’s remaining loan balance, all without picking up the phone. And when it comes to completing the payoff with the lender, this solution allows the dealership to submit payment via ACH, streamlining their process and eliminating the need to cut and mail checks and wait for them to arrive.
Now that the dealership can confidently make an offer for the trade, next on the agenda is figuring a reliable payment that includes the specific taxes and fees for North Carolina residents. To quote the right payment amount to the customer, it’s vital to know that North Carolina charges a highway use tax rather than sales tax and that there’s a flat fee for vehicles purchased outside the state.
Rather than relying on Google to help them piece together the tax and fee situation at the North Carolina DMV, this dealership uses an electronic 50-state registration and title solution. The solution can help the dealership as early as the desking stage by providing up-to-date taxes and fees for the state, county and municipality where the car buyer lives to help make sure the payment doesn’t change.
Reg & Title Without Borders
With all that taken care of, we’re almost at the finish line. Or are we? There are still North Carolina title and registration considerations for the new vehicle. Fortunately, the same out-of-state registration and title solution that helped with the payment calculation also provides step-by-step guidance and forms to submit titling and registration transactions for any state. That means the dealership can send the customer on his way without giving him an unwelcome errand to run when he gets back home in his new vehicle.
Realizing Full Profitability on the Trade
Finally, there’s that trade-in vehicle the dealership acquired, which they know is in demand. To ensure that they realize as much of that profit potential as possible, it’s important make sure that the clear title is on its way so it’s ready to go out onto the lot as soon as it’s reconditioned.
The problem is that manual payoff and title release can lead to the vehicle sitting on the lot waiting for a clear title. Dealertrack data shows that the average industry timeframe for the vehicle title release and payoff process is 18 or more days. In the meantime, holding costs accumulate each day, chipping away at the profit potential.
But remember when we mentioned that this dealership used their trade-in titling solution to initiate the payoff via ACH? That same solution speeds title release, so they can expect to have the title in hand within four to six days. Faster title release helps ensure faster inventory turn and improved cash flow.
Completing Your Digital Reg & Title Toolkit
Want to see how Dealertrack’s out-of-state registration and title solution RegUSA® can work with our trade-in titling solution Accelerated Title to bring the convenience of this scenario to life at your dealership? Schedule a brief, live demo with one of our specialists today.