Auto lending is a big part of the auto
industry, and electronic
signatures are an integral component. In this blog post, we will discuss
electronic signature laws and how they work in auto
lending. We will also discuss what dealerships need to know about electronic
signatures when considering remote
sales or leases.
The E-Sign Act
The
E-Sign Act (Electronic
Signatures in Global and National Commerce) passed in 2000 and went into effect on October 27, 2001. This act made electronic
signatures legally binding for all types of electronic contracts.
The E-
Sign Act was passed to regulate the use electronic
signatures for electronic transactions that cross state or national borders since they couldn't be regulated by individual states. The Act defines electronic
signatures as "an electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the document."
Therefore, under United States federal law, electronic
signatures are valid for all types of electronic
documents that cross state lines such as an electronic
loan or lease agreement.
What Dealerships Need to Know About Electronic Signatures When Considering Remote Sales or Leases
In order for
electronic signatures to be legally binding, they need to have the following characteristics:
- The digital documents must clearly identify that it has been signed electronically.
- There should not be any discrepancy between the electronic signature and the electronic records.
- The electronic signature must be unaltered and a true copy of the electronic data being signed.
- The electronic signature should not contain any additional agreements or terms that are different than what was agreed to in the original contract.
Dealerships need to make sure they know how electronic
signatures work before making remote
sales or leases available to customers. They need to make sure electronic
signatures are legally binding, which can only happen if each of the requirements outlined in the E-
Sign Act is met.
Benefits of Electronic Signatures in Auto Lending
There are several benefits to car dealerships and lenders using eSignatures for auto
loan documents, including the fact that they are:
- Legally binding and can be used for all types of electronic contracts that cross state lines.
- Less costly because they don't require printing and mailing paper contracts and documents.
- More secure than paper contracts and protect the electronic records from hackers.
- Available for use on any device.
- Faster and more efficient than the traditional signing process with wet signatures.
The benefits of
electronic signature solutions in auto
lending outweigh their costs, which makes them a worthwhile addition to many dealerships.
Utilizing electronic signatures for auto lending
In conclusion, electronic
signatures, not to be confused with
digital signatures, are an integral component of auto
lending. They can save time, cut costs, and increase productivity. Implementing eSignatures in your auto
lending business can lead to closing deals and making
sales faster.
