On March 31, 2020, NJ CAR informed its members that the Governor’s Office issued Administrative Order No. 2020-6, which permitted New Jersey car dealers to conduct online motor vehicle sales during the COVID-19 pandemic. That Administrative Order provides, in relevant part:
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. Such sales shall be deemed permissible in accordance with paragraph 6 of Executive Order No. 107. In the event of such a sale, the car may be delivered to the purchaser or the purchaser can pick up the car curbside or in the dealership service lane. Picking up a car from a dealership shall be considered essential retail business for the purposes of paragraph 6 of Executive Order No. 107.
Unfortunately, Administrative Order 2020-6 offers little to no guidance on how online sales should be conducted in this environment. That being said, the Order specifically requires on-going compliance with existing laws and regulations governing the motor vehicle sales process.
Online motor vehicle sales in a normal business environment involve numerous compliance issues. From the heightened risk of customer data breaches, identity theft and fraud, to the inadvertent violation federal and state “do not call” and electronic communication and contracting restrictions by sale staff, dealers who are not well-informed and prepared for online sales can easily end up on the wrong side of a government enforcement action or class action lawsuit.
On top of these pre-existing risks, dealers now also face new and unknown legal risks and exposure associated with the COVID-19 pandemic. In sum, online sales in this environment require studious attention to detail and preparation of compliant policies and procedures.
For these reasons, dealers should carefully consider the relevant issues with their private attorneys as they develop an approach to online sales. To that end, NADA has prepared a webinar, Legal and Regulatory Implications of Online Sales- What Dealers Need To Know, that addresses many of the issues NJ CAR previously highlighted for its members regarding online sales. This webinar is a valuable resource for both dealers and their attorneys as they move forward in this challenging environment.