In the mobile era, signing a contract is as simple as a swipe, click and tap.  Unless you are a dealer.  Federal law authorizes electronic contracts and signatures; yet the California Uniform Electronic Transactions Act prohibits electronic signatures on new or used auto sales and lease agreements, making California the only state to where dealers – and customers – cannot enjoy the convenience of electronic signing.

Yet, times are about to change. California is in the process of removing this legal impediment, and the change in the law will lead to increased dealer profits and a simplified car-buying experience for customers. The new law, scheduled to be approved by the Senate Judiciary Committee this Summer, deletes the dealer exemption from the UETA for conditional sale and lease contracts for vehicles, and authorizes dealers to choose to offer buyers and lessees the option of signing their respective contracts and agreements electronically.

The benefits of utilizing electronic signature solutions are countless. First, as smartphones and tablets have begun to dominant the completion of daily tasks, presenting contracts and financials in the same recognizable form will make customers more comfortable, improving the overall car-buying experience. If the car buying experience becomes as familiar as an online purchase, the experience will be likewise enjoyable.

Second, despite the initial expense in transitioning to a digital system, an e-signature platform will cut dealership costs. Printing documents gets expensive quickly. Electronic signatures and the documents they validate, on the other hand, are stored digitally, so contracts cannot be lost or accidentally destroyed. The comfort of knowing a reliable record of actions is always available will be of upmost comfort to dealers. Given that very few documents need to be retained in paper form, dealers that transition to electronic signature solutions can position themselves to reduce costs dramatically over time.

Third, an electronic signature platform will simplify the paperwork process. The traditional process is overwhelming and complex, requiring customers to make sense of a mountain of documents, understand the distinctions between the different types of forms, and identify all the correct places to sign. An electronic signature platform can present critical information to customers in a more intuitive way, capturing their intent without overwhelming them with complex paperwork. All told, moving to electronic signatures will make buying or leasing a car more accessible for the consumer, creating a simpler sales environment for the auto retailer, resulting in more sales and profits.

And the benefits do not stop there. Unlike traditional signatures, electronic signatures can also provide dealers with legal protection in instances where a customer repudiates a sale or contract. All it takes to forge a signature is a pen and one opposable thumb. But electronic signatures from reputable companies like Adobe carry a lot of information about a signer. Identification, authentication, and attribution are built into most electronic signature technologies, recording information such as the signer’s IP address, GPS location, and even how long they spent reviewing the document.

Should a customer ever deny signing a document or claim a document was edited after he signed it, the digital information associated with an electronic signature contains proof of both a signer’s identity and the document’s integrity. This evidence is admissible in litigation under federal law and state laws that designate electronic signature as legally enforceable, like California.

Given the imminent change in the law and the benefits of implementing an electronic signature platform, dealers should begin to familiarize themselves with the initial steps in making the transition. A first experience with electronic signatures doesn’t have to be all or nothing even implementing the technology in a limited way on a low-risk project is a great first step.