California Combating Auto Retail Scams (CARS) Act.

Header changed from Senate Bill passage format (with dates of passage by Senate and Assembly) to 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' with chapter number 354 and Governor approval date of October 6, 2025.

Page numbering changed from 'SB 766' format to 'Ch. 354' format throughout the document.

Text was reflowed with different line breaks and indentation throughout, but the statutory language is identical between versions.

The definition of 'restocking fee' changed from 'means both of the following fees that the dealer may charge' to 'means the following fees that the dealer may charge,' removing the word 'both' and slightly broadening the language so it is not limited to exactly two fee components.

All line-number prefixes (e.g., 'line 1', 'line 2') were removed from the bill text as part of converting from a draft format to the final enrolled format.

The amendment history dates (listing all prior Senate and Assembly amendments) were removed, replaced with the final passage dates: Passed the Senate September 11, 2025 and Passed the Assembly September 10, 2025.

Coauthor credits (Senator Stern and Assembly Member Kalra) and the legislative analysis line (Vote, Appropriation, Fiscal committee, State-mandated local program) were removed as part of the enrolled bill formatting.

New subparagraph (B) under the restocking fee definition allows a dealer that charged a shipping fee to retain the actual cost incurred for shipping, provided it does not exceed the standard 1.5 percent restocking fee cap (minimum $200, maximum $600). The dealer must refund any balance between the amount charged and the amount retained.

Section 1784.41(d) was corrected to remove garbled text and the phrase 'if true' from the requirement that dealers disclose lower monthly payments often increase the total cost. The disclosure is now unconditional rather than conditional on truthfulness.

The definition of 'used motor vehicle' or 'used vehicle' was corrected to reference only subdivision (f) instead of subdivisions (e) and (f), fixing a cross-reference error.

Removed the stray word 'car' from Section 1784.43(a)(1)(B), which read 'if the car used vehicle has been driven more than 400 miles.'

The price threshold for the three-day right to cancel a used vehicle purchase or lease was raised from $48,000 to $50,000. Vehicles priced above this amount are exempt from the cancellation right, so the higher threshold narrows the bill's consumer protection coverage.

The restocking fee calculation was changed from a miles-based formula (vehicle price multiplied by miles driven, divided by 150,000, plus a daily use fee of up to $60 per day) to a percentage-based approach: 1.5 percent of the sale price with a floor of $200 and a cap of $600, plus an additional $1 per mile over 250 miles capped at $150 total for the mileage component.

A typo in the bill title was corrected: 'Division 3 of of, the Civil Code' was changed to 'Division 3 of, the Civil Code.'

The amendment date was updated from July 17, 2025 to August 29, 2025, reflecting a later round of Assembly amendments.

The price threshold for the used vehicle right-to-cancel was raised from $48,000 to $50,000, meaning more expensive used vehicles are now covered by the cancellation right.

The cancellation window changed from three business days to three calendar days (starting the day after the purchase or lease is executed), with an extension only if the third day falls on a day the dealership is closed. This generally shortens the consumer's window to cancel.

A new definition of 'restocking fee' was added: 1.5 percent of the sale price (minimum $200, maximum $600), plus $1 per mile driven over 250 miles (capped at $150). This replaces the prior formula that multiplied the vehicle's cash price by miles driven and divided by 150,000.

A new definition of 'auction' was added to Section 1784.31, defining it as a sale transaction conducted through oral, written, or electronic exchanges where offers are solicited in the form of bids.

The prohibition on misrepresenting 'the time at which the transaction is final or binding on all parties' (former subdivision (g) of Section 1784.40) was removed from the list of prohibited dealer misrepresentations.

New provisions were added to Section 1784.43 requiring dealers to return the buyer's trade-in vehicle and all keys upon cancellation, with specific rules for determining fair market value if the trade-in was already sold (using a written offer honored by the dealer or a nationally recognized pricing guide).

New requirements specify what must be personally delivered to the dealer when exercising the right to cancel: restocking fees (unless deducted from refund) and the vehicle free of liens and in the same condition as delivered except reasonable wear and tear.

The bill's summary was expanded to state that it also amends Sections 2982 and 2985.8 of the Civil Code, in addition to adding Title 1.5B, which indicates the bill now touches on broader civil code provisions related to vehicle sales.

Section 1784.40(e) changed from prohibiting misrepresentation about 'the availability of vehicles at an advertised price' to 'a total price communicated by the dealer,' broadening coverage beyond advertisements to any communication, but added a safe harbor: a dealer is not in violation if the advertisement is withdrawn following the sale of the vehicle in compliance with Vehicle Code Section 11713(c).

Section 1784.41(d) narrowed from prohibiting any comparison between payment options to only 'written comparison[s]...during the negotiation to purchase or lease a specific vehicle,' and added an explicit exemption: use of an internet-based tool that allows consumers to adjust financing parameters does not constitute a violation.

New Section 1784.41(g) exempts used vehicles sold at an auction from the disclosure requirements of that section. A new definition of 'auction' was added to Section 1784.31.

New subdivision (m) added to Section 1784.40 making it a violation for a dealer to misrepresent whether a vehicle can be moved outside of California or outside of the United States.

Section 1784.41(a)(3) narrowed from requiring total price disclosure in 'the first communication with a consumer' to 'the first written communication with a consumer,' removing the obligation for oral or other non-written initial communications.

New retention requirement added in Section 1784.41(a)(3)(B): dealers must retain a copy of the first written communication for at least two years and provide it to the customer upon written request.

Section 1784.42(a)(2) removed the prohibition on charging for products or services 'that are duplicative of warranty coverage for the vehicle,' though a separate provision (a)(6) still addresses duplicative service contracts covering the same period as the manufacturer's warranty.

Section 1784.42(a)(4) removed the prohibition on charging for a service contract 'if the service contract does not cover the reasonable costs of repair,' narrowing the circumstances under which a service contract charge is prohibited.

Section 1784.42(b) changed from a prohibition on failing to pay add-on providers within 10 days to an affirmative duty to pay within 10 days, and added an exception: dealers may pay later if they have an agreement with the provider allowing delayed payment and the buyer's or lessee's coverage is not impacted.

Section 1784.42(c) added clarification that a dealer may charge for an add-on product or service 'even if the vehicle purchaser or lessee does not use the add-on product or service because a coverage event does not occur.'

New Section 1784.41(f) clarifies that subdivision (a) does not modify existing vehicle advertising requirements in Vehicle Code Sections 11713.1 or 11713.16, including the separate disclosure of rebates and incentives from a vehicle's total price.

New Section 1784.41(e) allows the disclosures required by subdivisions (b), (c), and (d) to be incorporated into a document that includes the written disclosures required by Civil Code Section 2982.2.

The definition of 'total price' in Section 1784.31 was simplified from listing out each excluded tax and fee individually to a cross-reference to 'the taxes, fees, and charges described in subdivision (e) of Section 11713.1 of the Vehicle Code.'

Assembly Member Kalra was added as a coauthor of the bill.

Added Section 1784.28 establishing that the entire title becomes operative on October 1, 2026.

The definition of 'vehicle' now explicitly excludes wholesale sales, vehicles not required to be registered, fleet sale transactions (more than one vehicle in a single transaction for business or commercial use), sales to commercial purchasers (five or more vehicles per year for business or commercial purposes), and vehicles with a gross vehicle weight rating of 10,000 pounds or more.

Narrowed several disclosure requirements by removing 'expressly or by implication, directly or indirectly' language, limiting obligations to written representations only rather than any form of representation.

Added a savings clause stating that the 3-business-day cancellation section does not affect a buyer's ability to rescind a contract or revoke acceptance under any other law.

The definition of 'used vehicle' now requires the vehicle to satisfy both the new subdivision (e) definition AND Section 665 of the Vehicle Code, and explicitly excludes motorcycles as defined in Section 400 of the Vehicle Code.

Added a new definition for 'material' or 'materially' meaning likely to affect a person's choice of, or conduct regarding, goods or services.

Removed the prohibition on misrepresenting the availability of rebates or discounts that are factored into an advertised price but not available to all buyers or lessees (former subdivision (d) of Section 1784.40).

Added a new prohibited misrepresentation regarding whether, or under what circumstances, a vehicle may be repossessed (new subdivision (k) of Section 1784.40).

Modified the purchase-versus-lease misrepresentation provision to clarify that dealers are not restricted from presenting multiple financing and lease payment options to a customer prior to finalizing the sale or lease.

Removed the prohibition on charging for add-on products or services that are duplicative of warranty coverage for the vehicle.

Narrowed the service contract prohibition: removed the requirement that the service contract cover the market value price for repair and the reasonable costs of repair, keeping only the prohibition on void contracts due to preexisting conditions.

Removed the separate prohibition on duplicative service contracts that cover the same time period as the manufacturer's warranty.

Added a requirement that dealers disclose on the first page of the purchase or lease agreement a specific statement informing consumers that California does not have a cooling-off period for new vehicles but provides 3 business days to cancel a used vehicle contract.

Removed the requirement that if a communication is in writing, the total price must be disclosed in writing (former subdivision (a)(3)(B)), simplifying the first-written-communication disclosure rule.

Added a new violation for a dealer to claim the person authorized to return the purchaser's or lessee's downpayment or trade-in vehicle is not available when the consumer exercises the right to cancel.

The consumer right to cancel a used vehicle purchase or lease was shortened from 10 days to 3 business days.

References to 'offering price' in certain disclosure and remedy contexts were changed to 'total price,' including the remedy for a dealer failing to sell at the advertised price (Section 1784.40(k)).

The requirement to disclose the offering/total price was narrowed from any communication with a consumer to only the first communication with a consumer regarding a specific vehicle.

Several disclosure requirements now include 'at least once' language, clarifying that a single disclosure satisfies the obligation rather than requiring repeated disclosures.

The add-on product or service disclosure must now be in writing and in the same language in which the contract was negotiated.

New prohibited charges were added: oil changes for electric vehicles, duplicative service contracts covering the same period as the manufacturer's warranty, catalytic converter markings on vehicles without a catalytic converter, and surface protection products that void the manufacturer's paint warranty.

The GAP agreement prohibition was simplified from detailed conditions (excluded coverage areas, loan-to-value ratio issues) to a single standard: the GAP agreement must comply with Sections 2982, 2982.2, or 2982.12.

The service contract prohibition was expanded to also cover contracts that do not cover the reasonable costs of repair.

The 'express, informed consent' definition and the requirement that a dealer obtain express, informed consent before charging a consumer for any item (former Section 1784.42(c)) were removed from the bill.

The record retention period was shortened from 7 years to 2 years from the date the record is created.

The mileage threshold at which a consumer loses the right to cancel was reduced from 2,000 miles to 400 miles.

A new definition of 'total price' was added (Section 1784.31(h)), defining it as the total sale price excluding taxes, registration fees, tire fee, compliance certificate fees, finance charges, mobilehome escrow fees, city/county mobilehome fees, electronic registration or transfer charges, and emission testing charges up to $50 plus actual certificate fees.

The repeal of Civil Code Section 2982.2 was removed from the bill's stated scope in the title and digest.

Section 1784.30(b) was deleted. It had stated that a dealer's failure to comply with the act constitutes an unfair method of competition under Section 1770 and is actionable under the Consumers Legal Remedies Act, Unfair Competition Law, Section 17500 of the Business and Professions Code, or any other applicable state or federal law. This removes explicit cross-references to specific consumer protection statutes, though Section 1784.22 still provides that remedies are not exclusive.

The definition of 'total price' was expanded from a single paragraph into three subdivisions. New subdivision (h)(2) clarifies that total price includes any dealer price adjustment and the cost of any item installed on the vehicle at the time of advertisement or communication. New subdivision (h)(3) clarifies that total price does not include any deduction for a rebate. Subdivision (h)(1) also adds a reference to taxes, fees, and charges described in subdivision (e) of Section 11713.1 of the Vehicle Code.

The nitrogen-filled tire provision was reworded to fix a drafting error. The Senate version had a garbled sentence ('the an add-on product or service... Nitrogen-filled tire-related products or services. services that contain less than 95-percent nitrogen purity') which was cleaned up to read 'Nitrogen-filled tire-related products or services that contain less than 95-percent nitrogen purity.'

Senator Stern was added as a co-author of the bill.

The term 'offering price' was eliminated and replaced with 'total price' throughout the bill. The separate definition of 'offering price' (full cash price excluding only governmental charges) was removed, consolidating pricing references under the existing 'total price' definition.

The prohibition on charging for nitrogen-filled tire products was narrowed to apply only to products or services that contain less than 95-percent nitrogen purity. High-purity nitrogen products (95% or above) are no longer categorically prohibited from being charged.

Dealers are no longer required to retain copies of 'sales scripts' and 'training materials' as part of their record-keeping obligations. The requirement now covers only 'advertisements and marketing materials.'

New record-retention requirements were added: dealers must now keep copies of all cancellation requests, proof of refunds of downpayments or other consideration, proof of return of trade-in vehicles, and all written complaints from car buyers or lessees relating to sales, financing, leasing, cancellation requests, add-on inquiries, and vehicle-related inquiries.

A new subdivision (b) was added to Section 1784.44 clarifying that dealers may keep required records in any legible form and in the same manner, format, or place as they already keep records in the ordinary course of business, and that failure to keep all required records is a violation of the title.

The cooling-off cancellation right for used vehicle purchases or leases was shortened from 10 days to 3 business days, giving consumers far less time to change their mind and return the vehicle.

A new price threshold limits the cancellation right to used vehicles sold at retail at a price equal to or less than $48,000 (as adjusted), exempting higher-priced used vehicles from the protection entirely.

A new carve-out in Section 1784.42 clarifies that dealers may still charge for add-on products or services (such as service contracts) if the consumer selected them and would benefit from them, even if the consumer ultimately never uses the product or service.

The mileage limit for exercising the cancellation right was reduced from 2,000 miles to 400 miles, meaning consumers lose the right to cancel after driving far fewer miles than before.

The record retention period for dealers was shortened from 7 years to 2 years, reducing the window in which regulators or consumers can obtain evidence of compliance violations.

The GAP agreement prohibition was modified to include a condition referencing compliance with Sections 2982, 2982.2, or 2982.12 of the Civil Code, adding an additional regulatory layer to when GAP agreements can be charged.

A new daily use fee of up to $60 per day was added that dealers may charge for each day the vehicle was in the customer's possession, on top of any restocking fee, increasing the financial penalty for canceling.