Pub 20-2021-2022 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 25 new jersey auto retailer W W W . N J C A R . O R G essential retail businesses. However, to decrease contact, EO 107 restricted the business activity only to auto maintenance and repair services. Subsequent administrative orders were executed to clarify that car dealerships were permitted to sell vehicles online ( Administrative Order No. 2020-6 signed on March 30, 2020, and No. 2020-10 signed on April 27, 2020 ). However, because the MVC does not accept documents signed via e-sig- nature, customers must still come to the dealership to sign the necessary paperwork. Two of the bill’s primary sponsors explained A5033’s connec- tion to COVID: Assemblyman Daniel Benson said, “The COVID-19 pandemic has forced every industry to adapt and innovate the way it does business. The auto industry is no exception. Though many of us are used to visiting a dealership and buying a car in person, we can now envision a future where purchasing a car online is commonplace. This bill removes regulatory hurdles.“ Assemblyman Anthony Verrelli commented, “We must con- tinue finding ways to keep people safe and help businesses stay af loat. Online car sales offer customers convenience, comfort and, during the pandemic, safety. Just as people can sign many other legally binding documents online, there’s no reason car buyers shouldn’t be able to electronically sign papers to pur- chase a vehicle.” The MVC has raised concerns about the bill. The bill does not impose any actions on the MVC nor require the commission to create new systems. Instead, the bill authorizes the MVC to acknowledge that electronic signatures secured from customers on transaction documents are valid, including electronic sig- natures on powers of attorney. Currently, the MVC recognizes powers of attorney with wet signatures from customers. This bill seeks to modernize that recognition. The MVC’s acceptance of a customer’s electronic signature on a power of attorney will authorize the dealer’s execution of the documents necessary for the sale, which is not different from what takes place today when a consumer provides a wet signature on a power of attor- ney. The MVC has also voiced concerns the bill may encourage consumer fraud, but we believe that concern to be misplaced. Today’s consumers understand the benefits of e-signature and the convenience of online consumer transactions. The second bill, A1366, addresses consumers’ need for f lexibil- ity in their transportation options. It allows licensed new car dealers to designate any car in their inventory as a subscrip- tion vehicle. Under this bill, a consumer who signs up for a car subscription would pay to use the car for a monthly fee ( includ- ing insurance, roadside assistance and maintenance ) and would not own the vehicle. The consumer would return the car after the subscription. The bill requires that the MVC design a license plate with an “S” designation and a marking indicating “Sub- scription Vehicle.” Since its introduction on January 14, 2020, the bill was voted out of the Assembly Transportation and In- dependent Authorities Committee and the full Assembly. On October 8, 2020, it was referred to the Senate Transportation Committee, where it awaits a hearing date. Its Senate coun- terpart ( S2256 ), introduced on March 16, 2020, also awaits a hearing in that committee. AUTOMOTIVE ADVISORS PROFESSIONALISM • QUALITY • RESPONSIVENESS Our team has over 30 years of extensive knowledge and experience with the automotive industry. Our firm provides individual attention to each client, helping to maximize their bottom line. • Financial Reporting • Tax Planning • LIFO Inventory Application • Performance Benchmarking Please contact one of our partners. Daniel J. Ferrari, CPA Amy M. Dillon, CPA John J. Entz, CPA 2755 Philmont Avenue, Ste 210 Huntingdon Valley, PA 19006 215-914-1400 www.danferrari.com In explaining why A1366 is important to consumers, Assem- blyman Benson, one of the bill’s three primary sponsors, stated, “Not every driver is interested in buying or leasing a car for the long-term. Subscription vehicles offer a more f lexible option for drivers not looking to make a lengthy commitment, while still providing access to important benefits like insurance.” Recognizing the bill’s much-needed boost during the COVID pandemic, Assemblywoman BettyLou DeCroce offered, “This bill will deliver a much-needed boost to another industry struggling due to the COVID-19 pandemic. My father owned car dealerships for over 50 years, so I understand firsthand the important role auto dealerships play in New Jersey and that they need to be protected.” This initiative to authorize motor vehicle dealers to offer sub- scription vehicle programs began in the 2018-2019 legislative session. Recommendations of improvements to the bill resulted in the bill being replaced by an Assembly Committee Substi- tute. This new version was re-introduced this legislative session as A1366, demonstrating the appeal of subscription vehicle programs as an additional competitive tool among franchise dealerships in New Jersey. Magdalena Padilla is NJ CAR’s Director of Government Affairs. She can be reached at 609.883.5056, x345 or, via email, at mpadilla@njcar.org .