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What is Auto Title Management?

Auto title management is an essential part of running a car dealership. Learn about the process of managing tiles with AFC.

Auto title management refers to the process of handling and administering the certificates of title for cars that are bought, sold or traded. Titles are legal documents issued by the state which demonstrate ownership of a vehicle, and can include information about the vehicle year, make, VIN, seller, purchaser, and transfer date. 

Managing vehicle titles is essential to a dealership’s operations, as it ensures each vehicle’s legal ownership is properly documented and transferred to the buyer upon sale.

What is involved in the auto title management process?

Managing titles effectively involves keeping accurate records of titles, ensuring they are properly registered, and promptly resolving any title issues that may arise.

There are several key components involved in title management:

  • Title Documentation, which includes collecting and maintaining all necessary documents, such as title certificates, bills of sale, and lien release documents.
  • Title Tracking, which requires dealers to have a system in place to track the status and location of each title in their inventory. This helps prevent loss or misplacement of titles and ensures they can be easily accessed when needed.
  • Title Registration, which involves registering titles with the appropriate state agencies. This is essential to establish legal ownership and protect against potential fraud or disputes.
  • Title Discrepancy Resolution: If there are any discrepancies or issues with titles, dealerships must promptly address them to avoid complications in selling or transferring vehicles.

Why is managing automotive titles important to independent dealers?

For independent dealers, managing titles correctly is essential to ensure that ownership can be properly transferred from the seller to the buyer. If the title is lost, damaged, or filled out incorrectly, it can lead to lengthy delays in how quickly cars can be acquired, reconditioned, and sold.

Beyond the basic requirements for selling a used car, dealers can find the impact of title management in just about every area of their business. These areas of importance include:

  • Compliance: Dealers must comply with state and federal regulations governing vehicle sales and title transfers. This includes accurately completing title documents, paying any applicable taxes or fees, and ensuring that titles are free of liens (unless arranged otherwise as part of financing).
  • Customer Satisfaction: Buyers expect to receive their vehicle titles in a timely manner post-purchase. Delays or errors in title processing can lead to customer dissatisfaction and potentially harm the dealer’s reputation and good standing.
  • Inventory Management: Proper title management helps dealers keep accurate records of their inventory. Knowing the status of each vehicle’s title helps in planning sales strategies and managing inventory levels.
  • Risk Management: Properly managing titles reduces the risk of fraud, such as selling a vehicle without a clear title or dealing with stolen vehicles. It also helps avoid legal issues related to the sale of vehicles with outstanding liens or encumbrances.
  • Financing: For dealers who offer financing options or work with third-party lenders, managing auto titles is critical. Lenders require that their interest in the vehicle be secured by placing a lien on the title until the loan is paid off.

For many dealers, title management can be a very time consuming process, and requires a great deal of oversight. In order to offset the bulk of administrative tasks involved in the process, some dealers choose to outsource the process of managing titles to a third-party vendor.

Bonus Resource: Read 3 Ways an Auto Dealer Floorplan Saves you Time

How does auto title management work with dealer floorplan financing? 

Floorplan financing is a revolving line of credit that dealers use to purchase their inventory. When a vehicle is purchased by a dealer and added to their floorplan, the physical title often does not go to the dealer, but to the floorplan provider. Once the unit on floorplan is paid off by the dealer, the title is delivered to the dealer—and then, typically, to the customer who purchased the vehicle.

Effective title management involves several key practices, including:

  • Tracking and Storage: Keeping detailed records of each title, including its location (physically or electronically) and status. This is crucial for quickly accessing titles when needed, especially for floorplanned vehicles.
  • Lien Management: Accurately recording and releasing liens on vehicle titles. When a dealer sells a car, they must pay off any outstanding balance of any balance related to that vehicle, so that the lender will release its lien and allow the title to be transferred.
  • Compliance: Ensuring that all titles and related processes comply with state and federal regulations. This includes properly documenting ownership changes, odometer readings, and any brandings (like salvage titles).
  • Coordination with Lenders: Working closely with floorplan lenders to ensure you’re receiving titles quickly, whether they’re being shipped from a centralized location or able to be picked up from your local branch. 

BONUS RESOURCE: Read the AFC Insights blog “What is floorplan financing?”

AFC – your trusted source for floorplan financing

Ready to drive your dealership’s success? Unlock the power of industry knowledge with AFC, your trusted companion in automotive finance. Learn more about floorplan financing solutions or take the next step and apply for floorplan financing today.


Disclaimer: Descriptions of AFC floorplans are for illustrative purposes only. Terms of AFC floorplan financing are subject to a final written agreement acceptable with AFC. AFC does not guarantee any results for floorplan financing and examples are for illustrative purposes only. Dealers should consult their own advisors to make independent business decisions regarding floorplan financing.

“AFC” refers to Automotive Finance Corporation, Automotive Finance Canada Inc., and AFC Cal, LLC in their respective jurisdictions. All California transactions are through AFC Cal, LLC. California loans will be made pursuant to Department of Business Oversight California Finance Lenders License. Canadian transactions are through Automotive Finance Canada Inc.