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California’s CARS Act: What the New Used-Car Law Does—and Doesn’t Do

California’s CARS Act brings new price-disclosure and add-on rules, plus a limited three-day cancellation right for qualifying used-car purchases, starting October 1, 2026.
Entry049 Date Time3 min MechanicCarCody Team
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California’s Combating Auto Retail Scams (CARS) Act, enacted as SB 766, takes effect October 1, 2026. It requires clearer price disclosures in covered communications, restricts specified dealer misrepresentations and add-on practices, and creates a three-day cancellation right for certain used-car purchases. It gives buyers new protections, but it does not guarantee that deceptive sales practices will disappear or make every purchase cancellable.

What is California’s new used-car law?

The CARS Act is a California law governing licensed dealers’ sales and leases of light-duty vehicles, including new and used vehicles. California DMV says it applies to vehicles under 10,000 pounds and identifies exceptions that include wholesale transactions, fleet sales of five or more units, auction sales and certain commercial purchasers. The exact coverage depends on statutory definitions and the transaction; consult the California DMV’s CARS Act guidance and operative law for a particular case.

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The DMV states that the law takes effect October 1, 2026. It changes disclosure and sales rules; it is not evidence that all dealerships engage in scams, nor a guarantee that the rules will eliminate deceptive conduct.

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What must dealers disclose about price?

For covered advertising or an initial written communication that refers to a specific vehicle or financing terms, the dealer must clearly and conspicuously disclose the “Total Price.” DMV says that disclosure must appear in the first email, text, document or form mentioning the vehicle or financing.

“Total Price” is the DMV’s term. Do not assume it always means the same thing as an out-the-door figure including every tax and government fee: the DMV summary does not establish the precise amounts included in the statutory definition. Check the written offer and applicable law rather than relying on a label alone.

Which sales claims and add-on practices are restricted?

According to the DMV, the Act bars specified material misrepresentations about purchase, finance or lease costs; whether a vehicle is available at the advertised price; add-on terms and benefits; trade-in or down-payment terms; and the remedy if the dealer does not honor an advertised price.

Optional products can include warranties, GAP products and theft protection. The DMV says dealers must disclose in writing, before signing, that an add-on is optional. It also says dealers may not charge for products that provide no meaningful benefit; one example is an oil-change plan for an electric vehicle.

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Before signing, read the itemized paperwork and ask the dealer to identify which products are optional, which charges are required, and whether the written terms match the ad or quote. Keep copies of the ad, messages, quote and signed add-on choices.

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Does California now have a three-day return period for used cars?

Not for every used-car purchase. The DMV summarizes a three-day cancellation right, including weekends, for qualifying used vehicles valued at $50,000 or less. The right is subject to eligibility conditions and transaction limits; the summary alone does not establish the exact procedure, mileage limits, fees, vehicle-condition rules or exclusions. Review the current statute and your sale paperwork before assuming a purchase qualifies or taking action to cancel.

This new right should not be confused with the older paid contract-cancellation option described in California’s Car Buyer’s Bill of Rights. That legacy information concerns a different option and should not be used to infer the threshold or conditions for the CARS Act right.

What records must dealers keep?

The DMV says dealers must retain specified compliance records for two years. Its examples include advertisements, initial communications, price disclosures, add-on consents and cancellation notices. This recordkeeping requirement can help preserve a written trail of what was advertised and agreed to.

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How can buyers prepare for a used-car purchase?

California DOJ’s used-car guidance recommends researching a vehicle, checking whether safety recalls have been repaired and arranging an inspection by a mechanic.

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  • Save the advertisement, first written quote, texts or emails, and final contract.
  • Compare the written price and financing terms with what was advertised; ask about differences before signing.
  • Ask for each add-on to be identified as optional or required and retain your written choices.
  • Check recall status and have a qualified mechanic inspect the vehicle before purchase when possible.

An OBD-II code reader can be an optional inspection aid, but it cannot identify every latent defect and does not replace a qualified mechanic.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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