Learn the basics about Electronic Lien and Title (ELT)

How does an electronic title transfer work?

The application process for an electronic title transfer is relatively simple. Paper titles are submitted to the DMV under the same procedures as when a lien is created. However, there is an additional identification number known as the “ELT ID Number” on the lien filing paperwork.

After an application is approved, the state DMV will send an electronic notification to the lienholder in place of a paper title certificate. Some states' DMVs require lienholders to first enroll with a service provider to view and manage an electronic lien.

When the lien is satisfied, the lienholder releases it electronically through their service provider. First, a notification that the lien has been satisfied is sent to the DMV. The electronic title is issued either automatically to the registered owner of the vehicle or to a new lienholder if one is added.

A lien is perfected when registration or titling documents are submitted to the DMV and processed. The DMV then sends an electronic notification to the lienholder. ELT service providers do not send electronic records to the DMV to perfect the lien.

Why can Electronic Liens and Titles seem complicated?

Adoption of ELT programs is ongoing, and the rules and processes vary by state. Each state chooses how and when to implement an ELT program and sets its own rules. This can add to the complexity of an already complex paper titling process — especially in states where lenders must juggle two separate processes simultaneously.

For example, California currently operates a voluntary ELT program. But the state plans to begin mandatory participation in 2021, according to the DMV.

The good news is that efforts are already in place to standardize the process. The American Association of Motor Vehicle Administrators (AAMVA) has created a standard for implementing and using an ELT system. But only six states currently use the AAMVA ELT Specifications: Arizona, Hawaii, Ohio, South Carolina, Texas, and Virginia. The rest have created unique standards or rely on various third-party providers.

How can working with a service provider help your lien and title ELT program?

Navigating different ELT rules across jurisdictions can be challenging. Instead of trying to stay on top of this constantly changing and complex area of law, partner with Wolters Kluwer Lien Solutions to efficiently handle the lien and title management process. Learn more about our title management services to help you keep your liens perfected — always.