The California Combating Auto Retail Scams (CARS) Act took effect on October 1, 2026, establishing mandatory total-price disclosures, strict prohibitions on hidden fees, and a three-day cancellation window for qualifying used vehicle purchases across the state.
California CARS Act Mandates Total Price Transparency
Automobile dealerships operating in California must now display the total price of a vehicle from the very beginning of any transaction. Under the CARS Act, which became law on October 1, 2026, the total price must encompass the vehicle’s selling price, dealer-installed items, and any dealer-imposed adjustments. This comprehensive figure is required in all advertisements targeting specific vehicles and must also appear in the initial written communication sent by a dealer to a prospective buyer.
Negotiations involving monthly payments carry strict written obligations. Dealerships discussing specific monthly financing terms must provide a clear written calculation of the total amount the consumer will pay over the life of the loan. Furthermore, if that calculation relies on a specific down payment or a trade-in vehicle value, the exact contribution amount must be explicitly stated alongside the total cost.
Prohibited Misrepresentations and Optional Add-On Restrictions
The legislation explicitly outlaws deceptive statements regarding financing terms, lease conditions, vehicle availability at advertised prices, or the true benefits of additional products. Dealerships can no longer obscure the actual costs of a transaction or misrepresent the consequences should a deal fall through.
When offering supplementary products or services during negotiations, dealers must provide written notice confirming that these items are entirely optional. Consumers maintain the absolute right to purchase or lease a vehicle without accepting any add-on packages. Additionally, charging for products that offer no tangible benefit to the buyer is strictly prohibited. Banned charges include specific tire products, GAP protection contracts, oil changes for electric vehicles, and catalytic converter etching when the service does not correspond to the specific vehicle being sold.
Three-Day Cancellation Window and Restocking Fees for Used Vehicles
| Provision | Regulatory Limit |
|---|---|
| Eligible Purchase Price | $50,000 or less (used retail vehicles) |
| Mileage Cap for Return | Maximum 4100 miles driven from contract signing |
| Standard Restocking Fee | 1.5% of vehicle price ($200 minimum, $600 maximum) |
| Excess Mileage Penalty | $1 per mile for distance exceeding 250 miles (up to $150 cap) |
Qualifying buyers and lessees of used vehicles now possess a statutory three-day window to cancel transactions. This consumer protection applies exclusively to retail used vehicle purchases priced at $50,000 or less, provided the vehicle has not accumulated more than 400 miles on the odometer between the initial contract signature and the exercise of the cancellation right.
The cancellation period spans three calendar days, commencing on the day immediately following the execution of the purchase or lease contract. If the dealership is closed on the final day of this window, the deadline automatically extends to the next business day. Exercising this return right allows dealerships to levy a standardized restocking fee. The allowable fee ranges from a minimum of $200 up to $600, calculated as 1.5% of the vehicle’s purchase price. An extra mileage charge of $1 per mile applies if the vehicle traveled more than 250 miles during the three-day holding period, capped at an additional $150.
