Electronic Contracts Can Save Dealers Money and Time

More and more automobile dealers are utilizing electronic documents for processing vehicle loans. With “e-contracting,” dealerships fill out and send most forms to lenders and product providers digitally, rather than shipping off thick envelopes the old-fashioned way. 

Dealerships that have adopted e-contracting often receive money faster, make fewer errors that can require redoing contracts and spend less time dealing with finance and insurance matters during a customer's purchase. E-contracting potentially can save tens of thousands of dollars a year and earn dealerships preferential treatment from lenders. E-contracting may also assist with organizing and record retention for regulatory compliance.

While your electronic loan documents may be in compliance with agencies such as the Texas Office of Consumer Credit Commission, please be aware that your dealership may not be “open for business” 24/7 according to the Texas Department of Motor Vehicles, even with electronic contracts. Vehicles must be delivered to the customer at your lot and you may not be open both Saturday and Sunday.

Another way go paperless is with the Electronic Lien and Title Program (ELT). Itallows TxDMV and a financial institution or lienholder to exchange vehicle title information electronically. Unfortunately, this is currently not available in all counties!  

The title record is sent electronically and the lienholder stores the electronic record instead of a paper certificate of title. The electronic title is created and held by TxDMV in the state motor vehicle database. Title applications are submitted and processed through the local county tax office. Under ELT, when a lien has been satisfied, the lender must submit an electronic release of lien. The lienholder is then removed from the record, receives an electronic notification and a paper title is sent to the owner.

ELT supports:
  • Electronic Lien notifications
  • Electronic Lien releases
  • Conversion of electronic titles to paper titles
When a paper title is necessary for a record with an active lien, the lienholder can request a printed title.


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