The DMV has some core functions that must be carried out by government such as verifying identity, issuing commercial driver's licenses, and inspecting commercial vehicles. All other functions should be considered for privatization.
As a public facing organization the DMV should be a service based business. Customer satisfaction should be a top priority. After all their function is to provide a service to taxpayers by collecting taxes in the form of vehicle registrations, license fees, and tickets. Unfortunately, the DMV as a state run monopoly has no reason to consider the people it serves as customers. Privatization of the DMV will change the incentives such that service and efficiency are promoted. Privatization offers opportunities for creativity and rapid change while simultaneously decreasing the overall size of government, freeing resources for law enforcement and improving service to the taxpayer.