Legislation Also Restricts Brokering by Used Car Dealers
Bill A5033, which would allow auto dealers to sell motor vehicles online and complete the sale by allowing transactional documents to be signed via electronic signature, was approved by the Assembly Transportation and Independent Authorities Committee earlier today.
The, bill if passed by the Legislature and signed by Governor Murphy, would formally allow motor vehicle sales to be conducted fully online. Customers could select and purchase vehicles and sign all transactional documents electronically. The Motor Vehicle Commission would also be required to accept documents signed via e-signature.
In April 2020, at the peak of COVID-19 pandemic in New Jersey, new car sales plummeted up to 80%, as motor vehicle dealers were forced to close their doors due to statewide stay-at-home restrictions. Online sales were allowed, but customers were still required to come to the dealership to sign necessary paperwork. Dealerships around the State quickly adapted, ramping up or expanding their online operations, even after NJ CAR successfully lobbied for in-person sales to resume in May 2020.
Some consumers prefer the online buying process, but without written signatures, the New Jersey Motor Vehicle Commission (MVC) could reject documents during the vehicle registration process. Bill A5033 would remove the regulatory hurdles to the virtual car-buying process.
In an effort to prevent internet fraudsters or unlicensed fly-by-night brokers from exploiting relaxed online and remote sales regulations under this bill, the legislation also tightens up and clarifies existing dealer licensing requirements. To that end, only properly licensed new and used car dealers would be permitted to engage in online and remote sales or take advantage of new e-transmission and e-signature procedures for titling and registering motor vehicles. While legislators and regulators were looking to facilitate online and remote motor vehicle sales and allow the NJMVC to take advantage of new technology to accept e-transmission and e-signatures of title and registration documents, they wanted to be certain they were not also making it easier for unlicensed or unscrupulous players to defraud consumers in e-commerce. This legislation strikes the right balance between the consumer and auto retailer desire to conduct remote and online motor vehicle sales, and the State’s interest in the strict regulation of motor vehicle sales.
The legislation is expected to considered by the full Assembly early next year. A Senate companion bill has yet to be introduced in the upper house.