Sioux Falls Billion Chevrolet dealership’s parking lot at 4200 W. 12th St. on Nov. 11. (John Hult/South Dakota Searchlight)
The South Dakota Department of Revenue’s Motor Vehicle Division will not print paper titles, effective immediately, due to paper supply issues, according to a news release.
The department will not print paper titles until mid-February 2023, unless a person makes a request online that is approved by the department. Reasons for requesting a printed paper title include the titled owner moving out of the state or the vehicle ownership needing to be transferred.
The Department of Revenue averaged 35,440 titles per month in 2021 and are averaging 33,755 titles per month in 2022, according to Rachel Soulek, a communications representative with the DOR.
While the shortage hasn’t spelled trouble for dealerships or their customers yet, it could soon, said Troy Engels, general manager at Sharp Automotive.
The Watertown dealership runs through about 80 to 90 titles for used vehicles a month. By the time February 2023 rolls around, that’s potentially affecting 270 transactions for Sharp Automotive alone.
“Dealerships are required to have a title or proof that the title is on the way to sell vehicles,” Engels said. “That’s where it’s going to get hairy.”
Used car dealerships will pay money for trade-ins, but they can’t make money until they sell that vehicle. That requires a title in hand. New vehicles have a Manufacturer’s Statement of Origin (MSO).
“It’ll make it tough if someone sells a vehicle to us and we can’t get a title,” Engels said. “We’ll have a lot of liquidity sitting on the lot that we just can’t do anything with.”
While the delay is during the winter, which has historically been a slow time of year for dealerships, businesses no longer experience a lull in customers. Engels said that online inventories keep business humming all year.
The paper used for titles has built in security features to prevent fraud. Oklahoma experienced a title paper shortage earlier in 2022, which created headaches for dealerships and customers.
“Like many other manufactured goods, the title stock supplier has suffered numerous unexpected supply chain delays which has delayed the shipment of title stock by months,” the Oklahoma Tax Commission told a local news outlet. “Due to the unique security features within an Oklahoma title, it is difficult to source this specific type of secured paper from other manufacturers.”
South Dakota titles are still being processed and individuals are able to check the status of their paperwork using their VIN online.
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