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Senate Passes Gopal Bill Allowing Dealers to Conduct Online Motor Vehicle Transactions

TRENTON – The Senate released timely legislation sponsored by Senator Vin Gopal that would authorize motor vehicle dealers to conduct sales online. The bill, S-3279/A-5033, further allows the buyer and the licensed automobile dealer to acknowledge all motor vehicle transaction documents by electronic signature, as a valid and acceptable alternative to a traditional ink signature.

“During the height of the pandemic, many sectors of our economy were able to utilize the convenience of conducting business online, up to and including an allowance for the signing of official documents with e-signature. At a time when many folks are looking to update their family automobiles, and when auto sales are starting to pick up steam after losses over the past year, an allowance for these online transactions just makes common sense, for buyers and sellers alike,” said Senator Gopal (D-Monmouth).

In April 2020, at the peak of COVID-19 pandemic in New Jersey, new car sales plummeted 70 percent as motor vehicle dealers were forced to close their doors due to statewide stay-at-home restrictions. An executive order signed by Governor Murphy allowed auto dealers to sell vehicles online, but customers were still required to come to the dealership to sign necessary paperwork. Without written signatures, the New Jersey Motor Vehicle Commission (MVC) could reject the documents during the registration process.

Under the legislation, the Chief Administrator of the MVC would be prohibited from refusing to accept electronically signed transaction documents and from requiring a notarized signature of any transaction documents completed by a licensed motor vehicle dealer.

The bill also requires the commission to permit the use of digital signature technology for the signing of documents and other appropriate purposes and to allow documents to be submitted in electronic form if the documents pertain to the provisions of the “Motor Vehicle Transaction Modernization Act.”

Under the amended legislation, “new motor vehicle dealer” means the agent, distributor, or authorized dealer of the manufacturer of the new motor vehicle who has an established place of business. A new motor vehicle dealer shall sell a minimum of four or more new motor vehicles within a 12-month timeframe and may engage in the business of buying, selling, or dealing in used motor vehicles in this State under the provisions of this chapter.

Under the bill, “used motor vehicle dealer” means a person engaged in the business of selling, buying or dealing in four or more used motor vehicles per year at an established place of business, but who is not a licensed new motor vehicle dealer. A used motor vehicle dealer shall engage only in the business of buying, selling, or dealing in used motor vehicles in this State under the provisions of this chapter and shall not engage in the business of buying, selling, or dealing in new motor vehicles in this State.

The bill was passed out of the Senate, by a vote of 38-0.