On the Dash:
- California dealers must disclose a vehicle’s total price in ads and first written replies starting Oct. 1.
- Used-car buyers can cancel within three days on vehicles priced at $50,000 or less.
- Dealers can’t charge for add-ons that give buyers no benefit, including EV oil changes.
California dealers face sweeping new rules on pricing, add-ons and used-car returns starting Oct. 1, according to Senate Bill 766 (SB 766), authored by Sen. Ben Allen (D-Santa Monica) and signed by Gov. Gavin Newsom on Oct. 6, 2025.
The California Combating Auto Retail Scams (CARS) Act requires dealers to advertise a vehicle’s total price, label add-ons as optional and give used-car buyers three days to cancel a purchase.
The act is modeled after the Federal Trade Commission’s (FTC) Combating Auto Retail Scams Rule, which a federal appeals court overturned on procedural grounds before it took effect. Federal regulators have separately pressed dealers on pricing, sending warning letters to 97 dealership groups in March.
Total price and add-on rules
Dealers must show a vehicle’s total price in any ad referencing a specific vehicle and in their first written reply to a shopper who asks about one. Total price includes dealer price adjustments and installed items but excludes taxes, government fees and rebate deductions. Any written monthly payment quote must also disclose the total the buyer will pay over the full term.
Dealers must state in writing, at least once during negotiations, that an add-on is optional. The law bars charging for add-ons that give the buyer no benefit, including oil changes for EVs, nitrogen tire products under 95% purity, and catalytic converter markings on vehicles without a catalytic converter. Dealers must pay the add-on provider within 10 days of the customer signing.
Three-day right to cancel
Buyers and lessees of used vehicles priced at $50,000 or less can cancel within three days for any reason, a right that ends once a vehicle has been driven more than 400 miles.
Dealers may charge a restocking fee of 1.5% of the sale price, with a $200 minimum and $600 maximum, plus $1 per mile over 250 miles, up to $150. Dealers have 48 hours to refund the buyer after a cancellation. The right replaces a two-day cancellation option that previously applied only to used vehicles under $40,000. New vehicles aren’t covered.
Records and exclusions
Dealers must also post cancellation-right signage in each sales office and keep compliance records, including ads, purchase documents and written complaints, for two years. The law excludes wholesale and fleet sales, buyers of five or more vehicles a year for business use, vehicles rated at 10,000 pounds or more, and motorcycles. Economists cited in Allen’s release project the law will save California car buyers $234 million and 8.5 million hours of time each year.
