By Kaitlin Gavin, VP & General Manager, Dealertrack RTS

Since the 19th century’s second industrial revolution, the metal-stamped license plates adorning vehicles have remained relatively unchanged. While registration and title operations are becoming increasingly streamlined on the backend thanks to modern technology, the outmoded need to physically manage license plates frustrates consumers and costs dealers time and money. This bottleneck reduces the capacity of an otherwise increasingly efficient chain of processes and represents a final frontier for registration and title solutions.

The digital revolution has laid the foundation for license plate innovation that meets the aesthetic beauty and technologically advanced expectations people have in new vehicles today – introducing the era of digital license plates and helping redefine the registration and title process. The company leading the charge, Reviver, began developing its first-of-its-kind digital license plates in 2009. Since then, California, Arizona, Michigan, and Maryland have begun pilot programs to test the concept in practice, with more states expected to follow.

This transition to digital also brings the potential of significant benefits for state agencies, car dealerships, and drivers. The challenge today, however, is the physical management of the plates, which carries significant labor and shipping costs as dealerships are responsible for tracking them meticulously. Currently, in several states, the DMV assigns each dealership a series of license plates and stickers based on their inventory needs. They are also legally required to return unclaimed plates to the state for security reasons and can incur steep fees if they fail to do so on time. The plate management dilemma could be alleviated if states decide to widely adopt digital plate programs, where registration could be obtained and transferred online without any risk of inventory loss or penalty. Additionally, dealers can save time and money associated with providing temporary plates to customers in the many states that do not allow dealerships to distribute permanent ones.

Dealerships aren’t the only entity burdened by this obsolete process. States are wasting valuable resources too. Servicing title and registration requests onsite is labor-intensive for employees and contributes to the infamous DMV wait times. The Baltimore Sun reports, “Each year, the MVA spends an average of nearly $500,000 to order and mail registration stickers to Maryland drivers. The stickers are valid for two years.” Digital license plates, however, have the potential to make DMV interactions more economical and less frequent thanks to digitization displacing a number of the agency’s operational pain points.

In states that require a trip to the DMV to obtain a license plate and sticker, the switch to digital offers consumers advantages that go far beyond just shorter lines. With the prospect of digital license plates, drivers no longer need to worry about the consequences of expired registration, as the technology can alert you and complete the task in a matter of minutes. The ritual of unscrewing license plates when purchasing a new car or moving between states can get left in the past. Drivers can look forward to seamlessness and peace of mind instead of chaos and confusion thanks to this technology.

In the current climate, digital license plates and their pilot programs are in their infancy and, unfortunately, dealerships may not be able to eliminate all their physical inventory just yet. For instance, in Arizona, even those drivers with digital plates must also have a metal version on the front of their vehicle to adhere to state law. While digital plates are a long way from being holistically rolled out to the public, the interest by participating states indicates a much larger need to modernize the current registration and title process in a way that simplifies the experience for consumers and minimizes overhead for dealers. Like any transition at scale, a shift to digital license plates wouldn’t be without bumps in the road, but the benefits may outweigh the costs that are currently imposed on states, dealerships, and individuals.

About the Author

Kaitlin Gavin is the Vice President and General Manager at Dealertrack Registration and Title Solutions.

Author: Contributing Writer

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