JPMorgan thinks a blockchain can help it keep track of the automobile inventory it finances for car dealers – and prevent them from pledging the same cars for different loans.

The bank’s wholesale car financing arm has filed a patent application describing a distributed ledger-based version of floorplan lending, a revolving line of credit that allows car dealers to borrow against retail inventory.

Every car sold in the U.S. has an individual vehicle identity number (VIN). The bank reckons that these can be anchored to a blockchain, assisted by a range of other telematic and geolocation sensors, which can remove inefficient manual pain points around auditing inventory on the dealership floor.

“The floorplan lending process involves periodically doing a physical inspection or audit of all the inventory on the dealership’s lot,” said Kevin Point, head of research and development at Chase Auto. “That means that a human being actually travels to the dealership, identifies the vehicles and then reconciles that inventory, if the loan’s outstanding, on both the dealer’s and the bank’s accounting system.”

Banks like JPMorgan, which have been busy testing and heads-down building blockchain systems for the last several years, are now clearly looking for practical opportunities that will see their bottom line improved by the tech.

About 17 million new cars are sold each year in the U.S, said Point, and when you add in used vehicles there are many millions sitting on floorplan lines of credit. Tracking them on a distributed ledger “will achieve cost savings over time. We believe these could be significant on an industry-wide basis,” he said.

The move is a slight departure for the Quorum blockchain, a private variant of ethereum developed by JPM. Previously, Quorum was used solely for abstract financial operations, issuing debt or linking payment networks of correspondent banks and such like. By contrast, the new Chase Network of Assets involves verifying physical objects.

Christine Moy, blockchain lead at JPMorgan, described it as a pilot in that it’s being tested with real dealership partners, but not in production yet. She also said Network of Assets could be applied more broadly, adding that JPMorgan is speaking to automakers about the blockchain system, but was not at liberty to say which ones at this time.

“Not only is JPMorgan and Chase Auto seeking to solve its own problem, basically it will benefit the vehicular and equipment industry at large,” Moy said. “The Network of Assets is the foundation for this particular application and use case, but can also be the foundational piece for many other value-added applications and services for auto manufacturers, other banks and finance companies, and dealerships, related to devices with telematics connectivity.”

As well as allowing much more in the way of real-time risk management, the DLT system is designed to prevent a practice known as “double flooring.”

“This is when accidentally (or fraudulently) a dealership may pledge one vehicle as collateral for one floorplan contract to one bank, but also pledge the same collateral for another floorplan contract with another bank,” Moy said.

JPMorgan’s idea is not entirely novel. For instance, Tata Consultancy Services, part of the Indian multinational group, has also been looking at blockchain for floorplan financing.

However, JPMorgan’s Quorum efforts are well established with a vibrant community around the tech, and it also provides the potential interoperability with tokenized payment systems such as the bank’s embryonic JPMCoin in a next-generation blockchain world.

For now, wholesale auto financing is a solid start, said Point.