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Electronic Signature on Powers of Attorney (POA) Update

Jul 07, 2022

On January 18, 2022, Governor Murphy signed the Motor Vehicle Transaction Modernization Act (“the Act”) into law. The NJ CAR-sponsored law permanently allows online sales of motor vehicles by licensed dealers, allows the use of electronic signatures on Powers of Attorney (POA), requires the NJMVC to develop the use of electronic signatures on transaction documents within twenty-four (24) months, and allows the price advertisement of vehicles that are inbound to dealerships. Many provisions of the law, including the use of electronic signatures on POAs was effective upon signing by the Governor.

NJ CAR had previously issued guidance on what the law requires for electronic signatures on POA and reiterates them here. The new law defines electronic to mean technology having electrical, digital, magnetic, optical, electromagnetic, or similar capabilities. The law also specifies that electronic signatures used to execute Powers of Attorney must be executed in accordance with minimum security requirements set forth by the National Highway Traffic Safety Administration (NHTSA) for Assurance Level 2 found at 49 C.F.R. 580.1 et seq.

Under the NHTSA, an electronic process must use a secure authentication system identifying a specific individual with a degree of certainty equivalent to or greater than an Assurance level 2 as described in the National Institute of Standards and Technology (NIST) in the U.S. Department of Commerce. NIST publishes a Digital Identity Guideline with definitions of three (3) authentication levels.

Authentication Assurance Level 2 (AAL2) is defined as providing high confidence that the claimant controls authenticator(s) bound to the subscriber’s account; requires proof of possession and control of two distinct authentication factors through secure authentication protocol(s); and requires approved cryptographic techniques at AAL2 and above. What is clear from the above is that simply emailing a POA to a customer and having them sign the document and scan it back to the dealership is not what is contemplated as an electronic signature under the new law.

NJ MVC has yet to issue guidance on what an acceptable POA using and electronic signature should look like. NJ CAR recommends that dealerships continue to secure wet signatures on POAs until NJMVC issues guidance. However, we are also mindful that some dealerships have already invested resources to implement an electronic signature system and have already secured POAs with electronic signatures. To comply with the law and anticipating what NJMVC might require, we recommend that any POA that uses an electronic signature should at a minimum include the following information:

1. Buyer’s full legal name and address
2. Vehicle Identification Number
3. Make, model and model year of the vehicle
4. Full legal name of the dealer representative appointed
5. The dealership name
6. Dealership license number
7. A statement above buyer signature lines indicating that “By signing below, I/we certify that the information on this form is true and correct. I/we are aware that the submission of false information or making of a false statement may subject me/us to penalties.”
8. Lines for printed buyer name and date
9. A separate line for buyer’s license number and state
10. A separate complete Dealer Certification as follows:


I, [Name of dealer officer], of [Dealer Name], New Jersey Dealer License number [Dealer License Number], certify that this Buyer Power of Attorney was signed by the buyer (s) electronically, using a secure authentication system and in accordance with the minimum-security requirements set forth by the National Highway Traffic Safety Administration under 49 CFR 5680.1 et seq. for assurance Level 2.

_________________________                                       _____________________
Name                                                                                                         Title

_________________________                                       _____________________
Signature                                                                                                     Date