New Jersey Lawmakers Revisit Online Car Sales Issues

New Jersey auto dealers want the state Legislature to legally clarify some of the details regarding electronic signatures and other aspects of selling autos online, as the coronavirus has exposed some confusion over what, exactly, dealers can and can’t do.

“It’s actually been lawful since 2000,” to sell vehicles online, says attorney Anthony Bush. “But most dealers, and the buying public, didn’t know.”

Sticking points include the acceptability of electronic signatures; whether signatures can be notarized remotely, or must be notarized in person; and whether allowing licensed new- and used-car dealers to engage in e-commerce also opens the door for “fly-by-night” unlicensed brokers to do it, too, Bush says in a phone interview.

Bills on those points are making their way through the state Legislature, he says. Bush is a Princeton, N.J.-based attorney with Eckert Seamans Cherin & Mellott. He says he’s confident dealers engaging in e-commerce already are on safe legal ground, but it would be valuable to clear up some misunderstandings.

In April, new-car sales in New Jersey plummeted “up to 80%” after the state forced dealerships and many other businesses to close their doors to in-person transactions, the New Jersey Coalition of Automotive Retailers says in a bulletin posted online for its members on Dec. 11.

“Online sales were allowed, but customers were still required to come to the dealership to sign necessary paperwork,” the bulletin says. The dealer association successfully lobbied in May for in-person sales to resume, but most dealerships continued to ramp up online sales, the association says.

Meanwhile, on March 30, Bush says the state already had issued an administrative order that said, “Car dealers may continue to conduct online sales or remote sales that can be completed by phone, text or email, and are consistent with current law.”

However, there was little understanding within the dealer community or at the New Jersey Motor Vehicle Commission of what “consistent with current law” meant in practical terms, Bush says. In addition, that administrative order could expire, leaving issues unsettled.

The bills before the state Legislature are aimed at making it clear dealers legally can conduct a sale entirely online, with electronic signatures and remote notarization, and excluding unlicensed brokers, he says.

Link to NJCAR bulletin:

https://njcar.org/latest-news/bill-allowing-online-and-remote-vehicle-sales-and-registration-passes-assembly-committee/