By Shawn Henry 
California car buyers will soon enjoy stronger consumer protections thanks to a sweeping new law signed by Governor Gavin Newsom this week. The California Combating Auto Retail Scams (CARS) Act, part of a broader package aimed at lowering family living costs, is being called one of the most significant auto retail reforms in decades.
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Under the new law, dealers face stricter requirements around advertising, sales practices, and add-on products. The legislation prohibits misrepresenting key facts about a vehicle’s sale, lease, or financing, and requires that all ads and price quotes clearly display the total cost of the vehicle. Dealers can no longer charge for add-ons that provide no tangible benefit to customers, and they must disclose that extras like GAP insurance or service contracts are completely optional.
The law also changes how consumers pay for add-ons. Buyers now have 10 days to make payment for any optional product or service — a major shift from the prior rule requiring full payment at the time of purchase.
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Perhaps the most consumer-friendly addition is a new three-day return rule for used cars priced under $50,000. Buyers can now return a vehicle within that period if it’s undamaged and has fewer than 400 miles added since purchase — a right long sought by consumer advocates and watchdog groups.
Beyond consumer protections, the CARS Act enforces strict compliance obligations for dealerships. Businesses will be required to retain all records related to advertisements, contracts, add-ons, and return documentation for at least two years, giving regulators more tools to monitor misconduct and resolve disputes.
The law is set to take effect on October 1, 2026, giving dealers time to update systems and sales procedures before enforcement begins.
Industry observers say the CARS Act could reshape the way vehicles are sold in California, marking a major victory for transparency in one of the nation’s most complex and high-cost auto markets.
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