It will soon be easier to get a car loan in N.J. thanks to a new electronic loan and title system

Anyone who’s bought a new car and hit that triumphant fiscal milestone paying off the loan knows that finally taking possession of the title can be challenging.

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This spring the state Motor Vehicle Commission will require lenders switch to a process that’s been under testing since last May that will make that process, as well as getting a loan, easier and a little cheaper.

“The NJMVC, in partnership with Champ Titles and Tyler Technologies, continues to make progress with the roll out of the Electronic Lien and Title system that we announced in May 2024,” said William Connolly, an agency spokesperson. “We have established an April 1, 2025, deadline for all lien-holders statewide managing five or more liens annually to use the ELT system.”

The system allows institutions financing vehicles in the state to exchange lien and title information electronically with the MVC and eliminate the need for manual processing and maintaining paper vehicle titles.

ELT allows the lien to be released electronically without the lending institution or customer needing to resolve the lien status by mailing paperwork, physically picking up documents, or making an in-person visit, officials said.

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In addition to making for a faster process for customers, the new system could even mean a lower rate and easier process for drivers seeking a loan to buy the next vehicle.

“It means the ability for lenders to put liens on and off titles,” Shane Bigelow, CEO of Champ Titles, Inc., said in an interview with NJ Advance Media. “Faster means attractive rates and is better for the consumer.”

The time savings for car buyers, drivers and lenders results from the difference between a paper system and doing the same process all electronically, he said.

When a person buys a vehicle, the dealer has to put a lien on the vehicle to secure a financial interest in it. The lender bears that transaction fee cost, Bigelow said.

“In New Jersey, you’re talking talk weeks for that interest to set in,” he said. Under Electronic Lien and Titling, “it sets in one minute, reducing interest and time.”

New Jersey joins West Virginia, Illinois and Kentucky which are the first states in the nation to use the Cleveland-based company’s software.

The change satisfies the intent of a 2023 law to have the MVC study if an electronic lien and title system could be in lieu of the current paper-based system. After determining the feasibility, the law required implementation in one year.

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Once a driver pays off their vehicle and the lien holder release the lien, a new paper title will be automatically printed and mailed by the MVC to the titled owner of the vehicle, MVC officials said.

The title also can be mailed to a specified third party by the owner, if the vehicle is being used for a trade-in, officials said.

The system reduces possibilities of fraud by handling lien transactions between financial institutions and the MVC in a secure, digital manner that reduces the handling, printing, storage, and mailing costs associated with paper titles, officials said.

The system also saves money for tax and MVC ratepayers because the state doesn’t have to pay to build an electronic lien and titling system, Bigelow said.

Ultimately, this system would be one of the building blocks to move to electronic registration and titling of all vehicles on the agency’s website.

“You’re accustomed to living the rest of life in the digital realm, the DMV is one of the last places you’re not,” he said. “Move this to digital realm and everyone is happier.”

This system also would be one of the building blocks to move to electronic registration and titling of vehicles on the agency’s website.