When was the last time you did one of the following:
- Ordered a new checkbook because you’d run out of checks
- Bought a magazine when you weren’t in an airport
- Walked into a concert or sporting event holding a physical ticket
- Purchased shares in a company and received a stock certificate in return
Can’t remember? Me neither. These habits, once commonplace, are fast becoming relics of a bygone age. And they all share a common denominator. What binds the near-extinct stock certificate to the baseball ticket stub is, of course…paper.
Paper has served us well over the centuries, but it has overstayed its welcome.
Paper slows us down. We lose paper. Paper can be stolen or destroyed in a flood. And for those with nefarious intentions, paper is easy to forge. Paper had a good run for thousands of years, but its time is up. Through the natural selection of technology, paper is being pushed out of our lives by better technologies.
But there’s at least one curious exception: the car title.
For many people reading this, you may have a folder at home and in that folder is a piece of paper, which is the title to your car. And that paper document is the only thing which proves the car in your driveway actually belongs to you. And if you lose that piece of paper, it’s a real problem: The link of ownership between the car and its rightful owner has been broken.
(If reading this prompts you to find your car title after having not seen it for years – you’re welcome.)
For businesses, paper titles are slow, inefficient and vulnerable to fraud. It’s strange to think that in 2023, multibillion-dollar banks still house physical vaults stocked with tens of thousands of paper titles for vehicles for which they’ve issued a loan. These titles need to be managed, processed and kept secure by teams of human beings. Not to mention the large online dealerships who have been threatened with, and in some cases banned, from doing business in certain states due to title delays on vehicles which they have sold.
And it’s not just businesses who have intense dislike for the paper title. Speak to any regular car owner and you are likely to hear a paper
I have many more examples of why the paper car title is no longer fit for its purpose, but I think you get the point.
Here’s the good news: There is a better way, and that is to update car-title technology for the 21st century. Like so many other assets in our lives, the car title should be digitized, enabling the transfer of vehicle ownership in minutes, rather than weeks. No more titles getting lost in the mail, no more fraud, no more delays.
Transferring ownership of a vehicle should be instantaneous, on any device, for any entity involved in the transaction. It would be a seismic shift for tens of thousands of businesses and millions of consumers in the U.S., no less compelling than the migration of the deeply flawed paper check to the efficiency of ACH, Venmo or Zelle.
So, if the paper title no longer works for us, and we’d all prefer digital, why is it still around?
Practically, there are 51 DMVs, each acting as the source of truth for vehicle ownership, and each performing that task extremely well. And when you run a process well, even when it’s done using obsolete technology, recognizing and embracing the need for change can be difficult. Admittedly a number of states have optimized certain parts of their processes, but in most places the end-to-end transfer of vehicle ownership is still a resolutely physical process.
Second, there are many participants in the vehicle transaction: dealers, lenders, wholesalers, insurance companies, DMVs and consumers. For the digitization of car titles to reach its true potential, all these stakeholders need to be participants in a new platform. And coalition building can be slow.
Thirdly, it’s important to maintain self-custodial ownership over something as important as a vehicle. For most people, their vehicle is one of the most valuable assets they own, second only to a home. The technologies required for the digitization of titles into a custodial asset (similar to the paper title) have only recently matured to a point that enables the conversion of an asset like a car title into a digital token on a blockchain. Ownership privileges can now be conveyed and exchanged through a decentralized digital platform, with digital tokens serving as the representations of tangible assets on the blockchain. The ability to do this hasn’t been around long, but the technology is now ready for prime time.
We now find ourselves with a rare opportunity. Removing paper from car ownership would be a radical improvement for consumers and businesses alike. The need is obvious, and the technology exists. All that’s required is the willingness to do it. I wonder who will have the determination, ingenuity and desire to be first?
Will Treves (pictured, left) is the chief operating officer of Cario, a transparent and secure network that enables the digitization of car titles for quicker, cheaper and safer automotive transactions.