The dealer association processes more than 1 million title and registration deals annually, he said, and verifies documents prior to deals being registered with the state. In normal times, it can turn around a single deal in three to six days, he added.
The association stopped accepting new transactions while the courier service was offline but resumed last week as couriers ramped up limited operations.
Tim Jackson, president of the Colorado Automobile Dealers Association, said one concern is the ability to perfect liens — the process of establishing a security interest — within 30 days as required under federal bankruptcy law. That provision gives dealerships protection from liability if a customer files for bankruptcy and the lender does not have a secured interest in the vehicle, he said.
In Colorado, county offices process titles and registrations, but some are closed while others are operating on limited schedules, he said. Jackson said his association advised dealers to ship title applications to the proper county office and retain mailing receipts.
“It doesn’t happen often,” Jackson said of the bankruptcy issue, “but under these circumstances that we’re operating under now, this could be a really big deal.”
Dealership cash-flow issues could be more immediate on the used-vehicle side if processing delays become a problem, Jackson and Appleton said. And while lenders normally pay on new-vehicle deals before titles are perfected, Appleton said via text message, “as this drags out, will they continue to do so?”
