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How Does New Law Permitting E-Signatures (A5033) Affect Dealership Operations?

Jan 21, 2022

On January 18, 2022, Governor Phil Murphy signed legislation requiring the New Jersey Motor Vehicle Commission to immediately accept e-signatures on Powers of Attorney and directing the state agency to adopt a system that allows electronic signatures on all motor vehicle transaction documents within 2 years.

Since NJ CAR advised dealerships of the new law earlier this week, our Motor Vehicle Operation has been inundated with calls and questions from dealers asking if this law requires dealerships to accept e-signatures or make any other changes in how dealerships submit motor vehicle work. Put simply, it does not.

This legislation was introduced and adopted at NJ CAR’s request, since a growing number of consumers wish to transact new and used car sales remotely and dealerships (and technology service providers) have been adapting the sales process to meet changing customer expectations. The NJMVC, however, has been slow to embrace change and the new law was necessary to move things along.

What Do Dealers Need To Know? 

  • The new law does not require that e-signatures be used on powers of attorney;
  • The new law does not address, and the NJMVC has not mandated, any particular format for the Power of Attorney. Dealers may continue to use the current Power of Attorney already in use in the dealership; and
  • The new law does not provide any detail regarding the mode of e-signature or mandate any specific software or electronic form of signature (scan, fax, Docusign, etc.).

Again, accepting e-signatures continues to be an option available to dealers as an accommodation to their customers. Dealers can choose to accept e-signatures or not. However, it is important for each dealership, in consultation with their management team, to determine what requirements they want to employ if they choose to accept e-signatures. The law does not address the type of internal controls dealerships should use for e-signatures on powers of attorney, nor does the law abolish the use of notaries if a dealer chooses to continue to notarize transaction documents.

NJ CAR will advise dealers if there are any further developments with respect to implementation of this new law or if the NJMVC provides any specific guidance concerning e-signatures on powers of attorney.