Electronic signatures (eSignatures) are transforming how dealerships handle contracts, applications, and paperwork.

By integrating eSigning technology, your dealership can improve efficiency, compliance, customer satisfaction, and the turnaround time of financing approvals.

The legal validity of eSigning for car dealers

eSignatures are legally binding for auto transactions under the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000. It states electronic signatures can’t be denied legal effect solely because they’re digital.

Whether it's a vehicle purchase agreement, financing contract, or lease document, eSignatures are recognized for their validity, enforceability, and compliance with federal regulations.

However, dealerships must be aware of state-specific eSignature laws that may impose additional requirements. Consult your dealership’s legal counsel to ensure your esigning processes comply with state laws and align with financial institution requirements.

Why car dealerships should implement eSigning

1. More efficient transactions

Esigning reduces the time required for paperwork by allowing customers to sign documents digitally. You’ll eliminate manual printing, scanning, and faxing for:

• Quicker approvals and funding, with pre-checked digital contracts sent directly to lenders
• Less time spent per transaction, allowing for a smoother customer experience
• Instant document submission, eliminating the delays accompanying paper-based processing

2. Enhanced accuracy and compliance

Errors in paperwork can delay transactions and lead to compliance risks. eSigning and digital document solutions help by:

• Preventing incomplete applications, ensuring all required fields are completed before submission
• Flagging potential compliance issues, maintaining adherence to consumer protection regulations

3. Improved customer satisfaction

Consumers expect convenience, speed, and transparency in their purchasing experience. eSignatures and digital documents improve customer satisfaction by:

• Allowing remote signing, eliminating unnecessary dealership visits
• Providing real-time contract access, ensuring buyers can thoroughly review and understand terms before signing

4. Increased dealership security

eSignatures and digital document solutions provide better security than paper-based processes. Key features include:

• Identity verification, through two-factor authentication and other precautions
• Tamper-evident technology, which seals documents after signing to prevent alterations
• Encrypted storage, safeguards documents from unauthorized access or physical loss

What to look for in an eSign solution

When choosing an esignature platform, dealerships should verify it includes:

• Customizable contract management for auto sales and financing agreements
• Compliance with federal and state esignature laws
• Remote signing capabilities, allowing customers to sign from anywhere
• Two-factor authentication and identity verification protocols to prevent fraud
• Integration with dealership systems, including DMS and CRM software

Creating a better car-buying experience with eSignatures

By implementing eSignatures, dealerships can:

• Reduce paperwork and speed up transactions
• Ensure legal and regulatory compliance
• Improve customer satisfaction with a frictionless signing process
• Enhance financing efficiency and secure faster approvals
• Increase security with encrypted, tamper-proof documentation

One of the many benefits of working with Credit Acceptance is our eSigning capabilities. To take advantage of this, join our dealer network today!