Buying a car should be simple, but dealerships often use confusing prices, hidden fees, and pushy sales tactics that make people pay more than they planned. To help car buyers and encourage fair treatment, California created the CARS Act. This important law aims to make car buying honest and transparent again.
When this law takes effect, it will change how prices are shown, how financing is explained, and how extras can be sold. It will also give many used car buyers a new right to return their vehicle. If you plan to buy a car in California, knowing about these protections will help you feel more confident.
What is the California CARS Act (SB 766)?
The California CARS Act, also called SB 766, is a law that protects consumers by stopping dishonest car sales practices and making prices clearer. It sets clear rules for how dealerships must show prices and costs, and it gives buyers more protection when they finance a car or buy extra services.
In short, this law makes sure car shoppers get honest, accurate information before signing a contract. It also stops dealerships from adding hidden fees or extras that aren’t worth it.
When Does This New California Car Law Take Effect?
SB 766 will start in California on October 1, 2026. This gives dealerships time to update their systems and sales methods to follow the new rules.
Once active, these regulations will apply to:
- New car sales
- Used car sales
- Vehicle leases
- Dealership advertisements & online listings
The timing is important. If you buy a car after the law takes effect, you’ll get all the new protections.
Key Protections for Consumers Under the CARS Act
The CARS Act gives car buyers four main new rights to be aware of.
1. Mandatory “Total Price” Transparency
Dealerships must clearly show the full price of the car, not just the down payment or monthly payment.
This means:
- No burying fees in the small print
- No posting low teaser prices that exclude mandatory fees
- Up-front clarity on what you’ll actually pay
This rule helps buyers compare prices fairly and avoid surprise fees when signing paperwork.
2. Prohibiting Deceptive Sales and Financing Practices
Under the law, dealers may not misrepresent:
- Vehicle price or discounts
- Financing terms or interest rates
- Your likelihood of being approved for financing
- The benefits of add-on products
Simply put, if a dealer gives you false or confusing information about what you’re paying or why, they are breaking the CARS Act.
3. New Rules for Optional Add-Ons and Service Contracts
Dealers often try to sell extras like service plans, GAP insurance, anti-theft etching, and extended warranties. Many of these are optional, and some may not be worth much to the buyer.
The CARS Act bans selling extras that don’t help the buyer. It also requires dealers to clearly say that these add-ons are optional and not needed to get financing or buy the car.
Dealers cannot:
- Bundle unnecessary extras into contracts
- Suggest add-ons are required to “qualify for financing”
- Charge for service products that do not apply to the vehicle (e.g., oil-change plans for EVs)
4. Your New 3-Day Right to Return a Used Car
For used vehicles priced at $50,000 or less, buyers will have three business days to return the car, as long as:
- They drove fewer than 400 miles
- The vehicle has no damage
- They pay a modest restocking fee (capped at $600)
This is a powerful consumer protection, giving buyers time to confirm they made the right decision, especially if pressured into a purchase.
How the California CARS Act Impacts Your Next Vehicle Purchase
These protections mean a more transparent, buyer-friendly process. You can expect:
- Clear pricing in ads and on dealership websites: Dealers must clearly display the actual total price of the vehicle, not just a low teaser price that excludes mandatory fees. For example, if a car is advertised at $29,995, that price can’t balloon to $35,000 once you’re at the desk because of undisclosed “dealer packages” or hidden fees.
- Honest, accurate finance discussions: Sales staff will be required to give accurate, non-misleading details about interest rates, loan terms, and whether financing “specials” actually apply to you. For instance, a dealer cannot tell you that you “must finance through us” to get a discount unless that’s truly the policy.
- No hidden add-ons slipped into contracts: You shouldn’t find fees for services you didn’t approve, such as paint sealants, key-etching programs, or service plans you never asked for. Any extras must be clearly optional, and you must give consent.
- The option to walk away from certain used-car deals: If you purchase a used vehicle under $50,000, you’ll get a three-day right to cancel, giving you a real cooling-off period to step back and reassess if something doesn’t feel right.
Overall, these changes are meant to take away pressure, stop dishonest practices, and make sure you know exactly what you’re agreeing to.
What to Do if a Dealer Violates Your Rights
If you think a dealership misled you or charged you for things you didn’t agree to or need, you may be able to take legal action.
Potential violations include:
- Advertising one price and charging another
- Adding service plans or insurance without consent
- Misleading financing terms
- Refusing to honor your 3-day return right for eligible used cars
If any of these things happen, it’s best to talk to an experienced California attorney. A lawyer can look at your contract, explain your rights, and help you seek compensation.
Contact Prestige Legal Solutions for More Information about California Car Law
Auto-purchase laws in California are evolving, Car-buying laws in California are changing, and the CARS Act is one of the biggest updates in years. Whether you’re getting ready to buy a car or think a dealer treated you unfairly, you don’t have to handle it alone. Prestige Legal Solutions has extensive experience advocating for car buyers across California. Our team knows the fine print, understands dealership tactics, and works to protect consumers from unfair treatment.
If you have questions about your rights or think a dealer may have broken the rules, contact us today to set up a consultation. We’re here to help protect you and make sure you’re treated fairly under California law.
Image Credit: fast-stock / Shutterstock