Insights

On March 31, Service Oklahoma issued a bulletin notifying motor vehicle dealers of updates to the state's electronic lien and title (ELT) system. Service Oklahoma is a division of the Oklahoma Office of Management and Enterprise Services and was created by the Oklahoma legislature in 2022 to provide driver and motor vehicle services on behalf of the state.

On or before July 1, 2023, Service Oklahoma was required to implement a program that would permit the electronic filing, storage, and delivery of motor vehicle certificates of title and allow a lienholder to perfect, assign, and release a lien on a motor vehicle in lieu of submission and maintenance of paper documents. The submission and maintenance of paper documents will be accepted through June 30, 2025. After that date, according to the bulletin, Oklahoma will become the first state to require electronic titles in virtually all cases. All titles will be issued electronically, with limited exceptions for those moving to another state. Existing paper titles will remain valid, but when the next transaction occurs (such as a sale, transfer, or lien placement), the title will be converted to an electronic record. The transition to ELT will not increase costs to vehicle owners. The standard title and registration fees will remain the same.

Even after July 1, however, some dealers may still have vehicles with existing paper titles. When that happens, the customer will receive the paper title as part of the purchase transaction. Once the customer completes registration in his or her name, the paper title will be converted to an electronic title.

The bulletin notes certain other changes (what the bulletin describes as "New Features") that took effect on April 7, 2025, including:

• Dealers will be able to add electronic liens for any lienholder using their OkCARS accounts. The option to complete this process in person will still be available.
• Once an electronic title has been issued, vehicle ownership will be transferred using an Electronic Title Bill of Sale rather than the title itself. The Electronic Title Bill of Sale will be available on the Service Oklahoma website to print, fill out, and notarize. The bulletin provides a preview of the new Electronic Title Bill of Sale.
• Dealers will be able to electronically transfer vehicle titles to their names through OkCARS without disrupting pre-registration. According to the bulletin, this feature is useful when a dealer takes a trade-in vehicle that does not come with a certificate of title on hand (or if the title doesn't have any space for transfers). When the dealer sells the car and completes pre-registration, the dealer can use OkCARS to put the vehicle's title in the dealer's name before signing it over to the customer, without canceling the pre-registration account. A licensed operator will then receive a case through OneLink to complete the dealer's request. While dealers will be able to complete this "slip-in" title process entirely online, they may still go to a licensed operator if they prefer an in-person experience.
• Customers will be able to see confirmations of their electronic or paper titles after logging into OkCARS. The bulletin claims that this feature will provide added convenience while potentially encouraging more Oklahomans to create accounts.

The bulletin includes links to frequently asked questions (FAQs) that will explain how the ELT improvements will impact lienholders and Oklahoma drivers as well as other resources concerning electronic liens and titles.

Some of the benefits of ELT for lienholders touted in the FAQs include immediate lien placement and removal/release, reduced administrative costs associated with managing physical titles, and stronger security features to prevent title fraud. Lienholders will have certain capabilities with ELT, including the ability to add and remove liens electronically, secure digital storage of titles (which will eliminate the need to hold paper titles), and streamlined communication with dealerships, financial institutions, and customers.

If you're a dealership or a lienholder and haven't set up an OkCARS account, you need to get moving! The clock is ticking, and July 1 is rapidly approaching.

Eric L. Johnson is a partner in the Oklahoma office of Hudson Cook, LLP. He can be reached at 405.602.3812 or by email at ejohnson@hudco.com.