How California Car Buying Laws Are Changing In October 2026

Almost a year after first being signed into law, California's CARS Act officially went into effect on October 1, 2026. Senate Bill 766, also known as the California Combating Auto Retail Scams Act (or the CARS Act for short), establishes several new requirements for how dealers sell cars. The full scope of the bill puts additional restrictions on vehicle prices, financing information, and optional products as well as creates a new cancellation period for certain used-vehicle purchases. It's all in hopes of giving car shoppers more information up front before they commit to buying.

With the CARS Act now law, dealers have to start disclosing a vehicle's total price in certain advertisements and written communications. According to the bill, the figure has to include dealer price adjustments and items already installed on the vehicle in the total price being advertised. That goes for any ad focused on a specific vehicle as well as any ad that gives a monetary amount or financing term for one.

It also applies to a dealer's first written response to a consumer inquiry for a specific vehicle. During these negotiations, any written discussion of monthly payments must also disclose how much the customer would pay over the full payment schedule. Dealers comparing payment options with the customer also have to let them know that smaller monthly payments can result in a larger overall cost.

The CARS Act becoming law also changes everything about buying certain used cars. From now on, dealers have to provide a three-day right to cancel any time a used vehicle is sold or leased at retail for $50,000 or less. The clock starts the day after the transaction, but that can be extended depending on the dealership's hours of operation.

Other stipulations: The vehicle can't have been driven more than 400 miles during the three-day period, and the buyer has to return it in the condition required by the law. The three-day provision also doesn't apply to used vehicles priced above $50,000 or to certain excluded transactions like auction sales.

That said, returning a vehicle doesn't necessarily mean getting every dollar back. Per the terms of the law, dealers are allowed to stick you with a restocking fee and/or additional mileage-based charges over 250 miles. If a buyer wants to cancel, the dealer has 48 hours to cancel the contract and issue the refund.

Another thing in the fine print: Dealers aren't allowed to charge customers for add-ons that provide no benefit to them. Dealers also have to hold onto all sales records for two years in case they need to prove compliance. Though many shady car dealership practices are illegal already, the CARS Act is nevertheless a nice extra layer of protection for prospective buyers in California.