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Bringing Your Dealership Into Compliance with E-Sign

Electronic signatures made their debut in 2000, when President Bill Clinton signed into law the Electronic Signatures in Global and National Commerce Act, which said that electronic signatures on digital documents were just as valid as paper-and-ink contracts. This law was firmed up again in 2010, with the Uniform Electronic Transactions Act, meant to facilitate interstate commerce.

What Is E-Sign?

E-sign, or electronic signatures, is a method of virtually signing documents and contracts. Rather than relying on hard copies, e-sign documents are files such as pdfs which have been virtually signed. The software used applies an e-sign assigns an encrypted private key to each user, which generates the signature. The document compares the signature to a public key, and rejects any signature that’s not a match. This system ensures that every e-signed document is safe from fraud or abuse.


In addition to the encryption, which must be in compliance with information security best practices, there are several other legal standards which dealerships wanting to use e-sign must be aware of to remain in compliance.


E-sign only applies if all parties have consented to sign the document electronically. Often, documents can be constructed to include a popup, informing a user of their right to consent or decline. These popups form a record of a user’s consent, which can be important if the document’s validity is later called into question.


Some documents are excluded from being able to be signed electronically. Wills, powers of attorney, sworn declarations, and other documents which require notarization cannot be e-signed. However, most business contracts, including sales agreements and loan paperwork, can be e-signed under most circumstances.

Signature Association

A valid e-signature must be associated with the person signing. For instance, the image of a signature generated by the encrypted key can only be used in the signature area, and only by the person linked to the signature.

Record Retention

Companies using e-sign must keep proper records, the same way they would with any other important document. They must also keep proper records associating the signature with the signer.

Benefits of E-Sign

Those standards may seem like a lot, but companies using e-sign for their document management enjoy several advantages over dealerships still using paper and ink.

  • Lower Costs. Odds are good that your dealership prints hundreds, if not thousands, of pages of sales agreements, loan applications, and other documents per day. The cost in paper and ink, not to mention wear and tear on your office machinery. Not to mention storage space. Instead of storing boxes and file cabinets of paper copies, you can free up valuable square footage by storing all your documents in a server and a backup.
  • Convenience. Many e-sign companies rely on embedded desktop apps for everyday use, but they also allow users to download apps to their smartphones, tablet, or other mobile devices. Having the ability to call up documents with the swipe of a finger or stylus can free your sales agents from wrangling with paperwork. Furthermore, customers can download the corresponding app to their own devices, and quickly affix their own signatures to the paperwork.
  • Efficiency. You won’t lose track of important paperwork when everything belongs to an easily searchable database.
  • Document Control. Many e-sign products come with pipeline management. Know at a glance who still needs to sign which documents, and send them easily to the people who need them. And integrated calendars help you stay aware of important deadlines before they pass you by.
  • Security. By adjusting permissions, you can ensure that only approved personnel can access the proper documents. Version control preserves changes, preventing important information from being accidentally deleted or lost. Your customers can rest easy knowing the extra steps you have available to protect their privacy.

The Right Tools

Given all these benefits, dealerships put themselves at a severe disadvantage by not incorporating e-sign capabilities into their business model. And while the legal standards may seem intimidating, the truth is, many products are on the market available to help your dealership attain compliance. The practice of e-sign was pioneered by eOriginal SmartSign, and they remain in business, with several products geared specifically towards car dealerships.

Other companies with robust e-sign products include DocuSign and SignEasy, who each have their own personalization and customization options. Carefully evaluate the needs of your individual dealership, and weigh these needs against what each product can provide. You don’t want to get left behind as other dealerships upgrade their model and streamline their practices.



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