There are few things more frustrating than finding a vehicle advertised at an attractive price, only to discover that the dealership has a completely different number in mind. Fortunately for California residents, a new law is taking aim at some of those unpleasant surprises, and dealerships now have additional rules to follow before customers even walk through the door.
The California Combating Auto Retail Scams (CARS) Act officially went into effect on October 1, 2026, introducing new protections against misleading vehicle prices, unwanted add-ons, and questionable dealership sales practices. Signed by Governor Gavin Newsom in October 2025, Senate Bill 766 also gives qualifying used-car buyers something they previously couldn’t count on without purchasing an additional option: three days to change their minds.
The legislation requires dealerships to disclose a vehicle’s total price in advertisements and their first written communication with potential buyers, although certain taxes and fees can still be excluded. It also prohibits dealerships from requiring customers to purchase non-manufacturer-installed add-ons, meaning an attractive sticker price shouldn’t suddenly depend on buying a collection of unwanted extras.
California officials have praised the changes as a major victory for consumers, estimating that the legislation could save car buyers millions of dollars and countless hours each year. However, the new rules don’t mean dealerships must offer lower prices, and shoppers will still need to pay attention to financing terms, permitted fees, and the conditions attached to returning a vehicle.
California Dealerships Must Disclose Vehicle Prices and Stop Pushing Unwanted Add-Ons
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New laws starting October 1, about the way dealerships have been selling cars.
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According to the California Department of Motor Vehicles, dealerships must clearly disclose a vehicle’s total price when advertising a specific car or responding to a shopper’s first written inquiry about it. That advertised amount must account for dealer markups and installed equipment, although qualifying taxes, registration expenses, and certain other permitted charges can still be added separately.
The legislation also targets unwanted dealership extras, prohibiting businesses from requiring customers to purchase optional products or services that weren’t installed by the manufacturer. Better yet, dealerships cannot charge customers for add-ons that provide no actual benefit, including questionable offerings such as oil-change packages for electric vehicles or catalytic-converter markings on vehicles that don’t have catalytic converters.
California State Senator Ben Allen, who authored the legislation, celebrated its signing, explaining that the measure would protect buyers from unnecessary fees and make advertised prices more transparent. State officials estimate the changes could save California consumers at least $234 million and 8.5 million hours annually, although those figures are projections rather than savings already realized.
California Used-Car Buyers Now Have Three Days To Return Their Vehicles
Perhaps one of the most significant changes involves used vehicles priced at $50,000 or less, which now come with a three-calendar-day cancellation right for qualifying purchases and leases. Instead of purchasing a separate cancellation option, eligible customers can return a vehicle for any reason within the permitted period, subject to applicable laws and allowable restocking charges.
That doesn’t mean someone can take a newly purchased vehicle on an unlimited road trip and return it without consequences, as the legislation allows additional mileage charges after 250 miles and sets a 400-mile return limit. Dealerships can also deduct a reasonable restocking fee, meaning the cancellation right offers valuable flexibility without guaranteeing that every dollar paid will be returned.
The California Business and Consumer Services Agency welcomed the new rules, with Secretary Rohit Chopra declaring that California was taking action against dealership junk fees and bait-and-switch practices. Whether the changes eliminate every frustrating part of buying a car remains to be seen, but California shoppers now have additional protections when an advertised bargain starts looking considerably more expensive at the dealership.