I think the VIN verification comes from a Federal law meant to control interstate vehicle theft, but each state has to figure out how to implement it.
Here verification is required for vehicles never before titled in Oklahoma, and when a used vehicle brought into the state the task is carried out by a "tag agent" who is a private business operator contracted to the Tax Commission (DMV does not get involved in title process). We've just gotten used to the idea that for a first time title application we bring the vehicle to the tag office, in case the agent wants to see it. There is a little extra fee for VIN verification.
Dealers have some role in verification, maybe for their own cars. Dealers here now title their used vehicle stock to themselves, and when they submit the applications to the tag agent, they send only the paperwork to the tag agent, not the vehicles.
If find dealers doing verification an interesting idea, because usually when a car theft operation here gets discovered and broken up, some of the principles are licensed as used car dealers. But we've sent tag agents to prison too, having the position does not provide immunity to temptation.