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Out of State, Out of Mind

Dealers who ignore the growing number of out-of-state buyers do so at their own peril. Operations expert offers a roundup of new technology for an emerging market.

May 2017, F&I and Showroom - Feature

by Jim Leman

©gettyimages.com/MrJub
©gettyimages.com/MrJub

From America’s living rooms to its neighborhood cafés, today’s consumers are spending about 12 hours online looking for just the right vehicle. And they’re not letting the dealer’s distance drive their decision.

In increasing numbers, car buyers are shopping dealerships outside their state for just the right vehicle, mileage, and deal. And dealership websites that promote automated out-of-state titling and registration will earn more of those customers’ business.

On Their Terms
Consumers immersed in ecommerce’s simplicity and convenience will appreciate how such services make buying vehicles out of state easier. These automated services accurately calculate and pay registration fees, taxes and other monies due to their local department of motor vehicles (DMV), so they avoid delay in enjoying their vehicle.

Based in Indianapolis, used-car superstore TruWorth Auto loudly promotes its out-of-state titling services on its website.
Based in Indianapolis, used-car superstore TruWorth Auto loudly promotes its out-of-state titling services on its website.

The majority of these out-of-state shoppers will be millennials who want all the info on display in an easy-to-read layout. J.D. Power projected that millennial-aged buyers bought 30% of new cars sold last year, and they will represent the majority of the workforce by 2025, according to the U.S. Census Bureau. That’s about 80 million consumers.

Ken Roberts, DealerDoc
Ken Roberts, DealerDoc

Dealers currently generate between 5% and 20% of their sales volume from out-of-state purchasers, depending on the franchise and marketplace. This segment will grow as these consumers extend their search reach and finance sources get more aggressive buying across state lines, says Ken Roberts, founder and CEO of DealerDoc, an out-of-state vehicle titling and registration service for dealers. He says the software was designed to free dealers from traditional (and error-prone) manual titling and registration processes.

“It would be great if every out-of-state lien were recorded correctly the first time, which a service like DealerDoc ensures,” notes Matthew Mulkey, senior vice president and dealer service center manager for CRB Auto.

The titling tool, Roberts says, while promoted on a dealer’s website, is used by F&I to expedite the out-of-state sale. It works with 50 state DMVs.

A dealership that assertively markets on its website that it offers buyers the convenience and simplicity of out-of-state titling services are announcing it is in the out-of-state car sales business in a big way.

Brad Rogers, RouteOne
Brad Rogers, RouteOne

“We know that for dealers located in border states, out-of-state titling is a big deal. It’s even a greater opportunity as more of the vehicle transaction moves online,” says RouteOne COO Brad Rogers. “Proximity to where the transaction occurs and where the car is ultimately sold and delivered matters less and less today.”

Roberts agrees. “The reality is, today’s digital buyers will not let borders limit their choices or how businesses service them.”

Auto retail consultant Ed French adds: “As the Internet has eliminated barriers in customers’ minds, shipping and titling barriers need to fall too.” He operates AutoProfit Automotive Consulting and is a member of the board of directors at TruWorth Auto, a used-car superstore in Indianapolis. The store’s website loudly promotes its out-of-state titling services.

Vroom Corporate Controller Todd Wilkinson says the national reach out-of-state titling affords the online retailer is central to its growth.
Vroom Corporate Controller Todd Wilkinson says the national reach out-of-state titling affords the online retailer is central to its growth.

The national reach out-of-state titling software affords Vroom is central to the online pre-owned retailer’s growth, says Corporate Controller Todd Wilkinson. The firm’s website lets consumers use the titling tool to obtain a quick and accurate summary of their tax, tag, title and licensing fees to facilitate the purchase of a vehicle.

The F&I Connection
Ecommerce titling services seem to fit the move toward online F&I to complete the online car transaction, says Jim Maxim Jr. of MaximTrak, a digital F&I technology firm recently acquired by RouteOne. “Consumers continue to expect transactions and business engagements to be more satisfying and transparent, whether delivered online or in the store. They want the seamless online experience they control — and both had better be fast,” he says. “Dealers able to meet these high-tech expectations will have a huge advantage over those that do not.”

In the military-heavy San Antonio market, electronic lien and titling is critical to securing servicemember business for Red McCombs Toyota.
In the military-heavy San Antonio market, electronic lien and titling is critical to securing servicemember business for Red McCombs Toyota.

Dealers serving military families find such technology a convenient and accurate solution for titling vehicles out of state for buyers based in those dealers’ communities. “Many of our customers are stationed here in San Antonio but want to register their vehicle in their home state, so this out-of-state electronic service lets us do that quickly and accurately,” says a spokesperson for Red McCombs Toyota, which operates in a heavy military market. “I have had customers buy from us because a competitor did not want to bother with their out-of-state titling.”

Another out-of-state titling and registration option is DMV.org. It offers general and state-specific out-of-state titling information and website for consumers and dealers. Its click-to titling and registration details by state are handy and useful features. However, the site does not calculate fees and taxes for the dealer and offers no guarantee the end results will be accurate.

And F&I managers and their millennial-aged customers accustomed to high-end push-button experiences may balk if an out-of-state titling process is not.

Jim Leman has been writing about automotive variable and fixed operations since 1992. Reach him at jim.leman@bobit.com.

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