LOS ANGELES, CA – California has enacted the Combating Auto Retail Scams (CARS) Act), a sweeping overhaul of dealership advertising, pricing, and paperwork standards that Governor Gavin Newsom signed on October 6, 2025. The law takes effect October 1, 2026, giving retailers a year to retool how they market vehicles, present numbers to shoppers, and document each step of a sale or lease. At its core, the measure aims to replace gotcha fees and opaque pricing with early, uniform disclosures and verifiable records-while adding a first-in-the-nation, three-day return right for most used-car purchases under a set price cap.
What changes for buyers and dealers:
- Early, accurate numbers: If an ad or message shows a number for a specific car, it must also show the total price-including any required dealer-installed items—up front. MSRP-only teasers are out unless that’s the true total price. Dealerships must save these communications for two years.
- Payment comparisons with context: Any discussion of monthly payments must include the total amount the customer would pay over the term, and clearly note when a lower monthly number results in higher overall cost.
- Optional means optional: Add-ons must be plainly labeled as not required, and “junk” products that don’t benefit the buyer are prohibited.
- Used-car cooling-off right: For most used vehicles ≤ $50,000, buyers get three days to return the car if kept in essentially the same condition and under the mileage limit. A capped restocking fee can apply; financing is reversed on return. New vehicles and certain transaction types are excluded.
- Enforcement teeth: Violations can be pursued as unfair or deceptive practices under long-standing California consumer-protection statutes, enabling restitution and injunctions alongside other remedies.
California’s law steps into a gap left when the FTC’s federal CARS Rule-finalized in 2024-was set aside on procedural grounds earlier this year. SB 766 carries many of the same themes into state law, with some California-specific clarifications negotiated during the session.
Timeline:
- Signed: Oct 6, 2025
- Effective / enforceable: Oct 1, 2026
Joe Mcdermott is a staff reporter who keeps his eyes peeled for interesting automotive news. He works mainly for our Long Island Guide as well as our IT firm, SEARCHEN NETWORKS®. Mcdermott, one of our first and thus veteran reporters, is also a data analyst for select independent news and media organizations in the United States.