BMV and Auto Dealers and State Agencies and Government & Economic Development

Car dealers to offer license plates

February 19, 2007

Hoosiers hate waiting in line at the BMV. Those wanting to avoid the hassle soon will have another option, but will have to pay about $20 to use it.

The Indiana Bureau of Motor Vehicles is launching a project to allow automobile dealers across the state to provide title and license-plate registrations.

Privatization of the service could shorten lines at BMV branches, attract more potential customers to car lots, and create a windfall of revenue for dealers.

"This is an alternative to the branch, not a replacement," said BMV Commissioner Ron Stiver. "The primary driver behind it is convenience. That's the first, second and third driver."

BMV has negotiated an agreement for Los Angeles-based Computerized Vehicle Registration GP to run the system. CVR is a 15-year-old software firm that lists 24 states as clients, including Illinois and Michigan.

A "convenience fee" for each transaction, likely $20, will be split between the company and dealers. Dealers also will pay CVR an installation and maintenance fee for the software and a specialty printer.

The company's system allows dealers to register and license cars the instant they close a sale. It's used in 8,000 auto dealerships across the nation, and processes 650,000 transactions every month.

The company is in preliminary development of a pilot project that will test the software in 18 Hoosier auto dealerships. The pilot, which likely will last 30 to 60 days, will begin in early summer, said Ken Mehall, CVR's vice president of business development.

CVR then plans to roll out the system for every Indiana auto dealer that wants to participate. The state has more than 500 new-car dealerships, and countless used-car dealerships.

Auto dealers are thrilled.

Besides possibly attracting new customers by its convenience, the system will also simplify paperwork for dealers, reducing the need to shuttle title documents to BMV offices, said Marty Murphy, executive vice president of the Automobile Dealers Association of Indiana.

The convenience fees for dealers and CVR could add up quickly. The BMV has processed nearly 5 million motor vehicle registrations, title transfers and registration renewals during the last nine months.

Mehall said CVR's goal is to capture at least 70 percent of Indiana's car registrations once its system is statewide. In Virginia, the company's most mature market, 90 percent of new-vehicle registration is completed at the dealership, he said.

CVR's service costs the BMV nothing. And customers who don't want to pay the fee can continue using one of the state's 142 BMV branches, which Stiver said will remain the only place to get operators' licenses.

Stiver said development of the project, dubbed the Customer Choices Program, began under his predecessor, Joel Silverman.

The BMV studied similar systems in Massachusetts, Texas, Florida and California. Stiver said the BMV also is considering allowing motor clubs like AAA to offer the services, and possibly banks as well.

"Really, we're not creating new ground here," Stiver said. "The exact same model has been implemented elsewhere to large success."

But if a large share of the BMV's transactions end up handled by auto dealerships, the privatization could lead to the shuttering of more license branches.

Silverman stepped down from the BMV's helm in October when faced with mounting ire after he shuttered more than two dozen BMV branches and had problems with a major computer upgrade.

Stiver said he expects no changes at BMV branches.

Auto dealers will have a strong motivation to sign on to the system, said Richard Feinberg, director of the Center for Customer-Driven Quality at Purdue University.

"Here is a free way that gets people in the showroom," he said. "You just never know when that visit to the showroom will result in a sale."

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