Key provisions mandate dealers to disclose the total price upfront in advertising, enabling online comparisons and reducing time spent at dealerships
The California Legislature has passed SB 766, the California Combating Auto Retail Scams (CARS) Act, championed by Senator Ben Allen (D-Santa Monica), to bolster transparency and consumer protections amid rising car prices exacerbated by new tariffs under President Trump. The bill introduces measures to make vehicle purchases more affordable and less risky, including a pioneering 3-day cooling-off period for used car buyers.
Senator Allen highlighted the need for reform, stating, “For years, car shoppers have often complained about deceptive practices that lead to higher prices or unfair deals. The California CARS Act will make cars more affordable, and will benefit both car buyers and honest car dealers by making the car market in California fairer and more competitive.” The legislation mirrors parts of the Federal Trade Commission’s overturned CARS Rule, which leading economists estimated would have saved U.S. car buyers $3.4 billion annually and 72 million hours spent on shopping and haggling. For California, economists from Stanford, MIT, Clemson, University of Arizona, and University of Michigan project savings of $234 million and 8.5 million hours yearly, though they did not assess the cooling-off period’s impact.
Key provisions mandate dealers to disclose the total price upfront in advertising, enabling online comparisons and reducing time spent at dealerships. The bill also bans charging for worthless add-ons, such as lifetime oil changes for electric vehicles or service contracts voided by pre-existing damage. The new 3-day cooling-off period applies to used vehicle purchases or leases up to $50,000, allowing returns for any reason within three days for a full refund, minus a restocking fee capped at 1.5 percent of the price (up to $600) and potential mileage charges of $1 per mile over 250 miles, provided the car hasn’t exceeded 400 miles and remains in its original condition barring reasonable wear or unforeseen defects.
California Attorney General Rob Bonta, who led a 19-state coalition supporting the FTC’s rule, endorsed SB 766 in a letter to legislators last month.
