Key players in automotive retail are pushing for relaxed requirements for obtaining wet customer signatures to complete vehicle sales.
Huw Williams, public affairs director for the Canadian Automobile Dealers Association (CADA), said his organization as well as the Motor Vehicle Retailers of Ontario (MVRO) and the Canadian Financing and Leasing Association (CFLA) are preparing a white paper examining issues related to physical — aka wet — signatures. Solutions include electronic signatures and providing more flexibility as to the physical location when documents must be signed in person.
The regulations governing automobile sales are a holdover from a time when online shopping and other nontraditional means of selling vehicles didn’t exist, Williams said. The white paper, due to be released in June, is designed to help bring retailing vehicles “into the modern era,” he said.
Frank Notte, director of government affairs for MVRO, said the Ontario Motor Vehicle Industry Council (OMVIC), the government agency that regulates vehicle sales, ruled that while transactions completed entirely online are legal, deals conducted either in-person or a combination of online and in-person can only be completed at the dealer’s physical address.
“That’s the very thin line,” said Notte. “If the deal online is complete, all you have to do is pick up the keys.” MVRO was formerly called Trillium Automobile Dealers Association.
If deals to buy houses or multimillion-dollar businesses can be conducted anywhere at the parties’ convenience, a restriction on purchases typically less than $100,000 in value seems unreasonable, Notte said.
“You’re prohibited from doing a deal in a Tim Hortons or at your kitchen table,” he said. “It’s something that’s always on [our] radar.”
WHAT’S STANDING IN THE WAY OF DIGITAL SIGNATURES?
The policies of some banks and captive lenders remain a roadblock, Notte said. The CFLA said it supports the use of e-signatures and other methods of easing transactions, but the Ontario Motor Vehicle Dealers Act stands in the industry’s way.
“To be clear, financial institutions are not saying no to digital signatures, they’re saying sales contracts must comply with the law,” said Scott Long, manager of membership and communications for the CFLA. “And this means respecting the Motor Vehicle Dealers Act, which specifically requires that ‘trading in a motor vehicle’ must take place at a dealership’s registered premise.
“The CFLA not only supports the use of digital signatures in financial transactions across Canada, including auto loans and leases, but actively advocates for legislative changes to allow them.”
The law doesn’t include specific requirements about obtaining signatures, only that “a motor-vehicle dealer shall not invite the public to deal in a place other than a place authorized in the registration of a motor-vehicle dealer,” said Praveen Senthinathan, a spokesperson for the province’s Ministry of Public and Business Service Delivery.
Complicating the issue, said CADA’s Williams, are the differing requirements across the country. The white paper is an attempt to find a broader solution, he said.
In Ontario, Notte said, the goal is to change the law, even slightly.
“What we plan to ask the government to do is take a look, can we update the [Motor Vehicle Dealers Act] to allow for off-site transactions?