Illinois green lights modernized vehicle title and lien processing system
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The state is exploring how an electronic approach to vehicle registrations and purchasing can lower costs for residents and financial institutions.
For many people, purchasing a vehicle is no easy feat. Aside from the often-high price tag, customers must gather and manage the required documents to verify the sale, enduring long wait times at motor vehicle departments to do so.
Illinois aims to simplify the process. The Secretary of State’s Office has adopted an electronic lien and titling, or ELT, platform from CHAMP Titles to enable users to digitally process, store and release vehicle titles.
With the platform, customers who purchase a vehicle can complete an online title application, which goes through the lender to the Secretary of State’s Office for review. The electronic record is then stored until the lien is ready to be released.
The modernized system will help reduce the need for paper processes, sending documents in the mail or conducting in-person DMV visits, streamlining the process of purchasing cars for Illinois consumers, autodealers and lienholders, said Max Walczyk, communications manager for Illinois’ Secretary of State Office. The digital transmission of vehicle lien and titling data can help eliminate delays and backlogs often caused by manual processes.
At least 25 states have implemented an electronic lien and titling program. For Illinois, the implementation of ELT has been 20 years in the making. Lawmakers approved the technology’s use in 2000, but an outdated tech infrastructure delayed efforts to adopt ELT.
When Secretary of State Alexi Giannoulias came into office in 2023, he prioritized investing in the state’s tech infrastructure to “help bring Illinois into the modern age of car titling,” Walczyk said. “What used to take months can be done with a few clicks, dramatically reducing the ‘time tax’ customers and dealers were forced to pay when titling and registering a vehicle.”
“ELT not only saves time, but it also closes vulnerabilities associated with paper titling that can lead to fraud,” Walczyk said. The electronic system can, for instance, securely store lien documents, which can help prevent bad actors’ use of fraudulent liens to apply for new titles.
More innovative and efficient lien processing systems can help reduce cost burdens on financial institutions and customers, said Shane Bigelow, CEO of CHAMP Titles. Longer processing times can, for instance, push banks to impose higher lending rates on customers to offset potential risks during the waiting period.
ELT can also impact high insurance premiums customers face. If a vehicle is involved in a crash, insurance carriers may purchase it from the policyholder when the cost to repair the vehicle exceeds its value, Bigelow explained. That means the title has to change hands to the insurance carriers, which is an expensive process for them.
The share of vehicles deemed a total loss out of collisions was 27% in 2023, up from 19% in 2018. To offset the high costs of increasing total losses and title exchanges, insurance carriers will raise premiums for customers, Bigelow explained. With a simplified and less expensive ELT, those costs no longer need to be carried over to customers.