A California law taking effect on Oct. 1 is set to ease the car-buying experience by giving buyers new safeguards against hidden costs, misleading terms and high-pressure sales tactics.
Under Senate Bill 766, officially known as the California Combating Auto Retail Scams (CARS) Act, dealerships are required to advertise a vehicle’s total price and must identify which add-on features or services are optional. Dealers are also mandated to clearly represent their terms for purchasing, financing or leasing a vehicle.
The law, authored by Senator Ben Allen, D-Santa Monica, also puts a halt to charging for add-ons that Allen described as unhelpful for consumers, such as free oil changes for an electric vehicle.
“This bill will codify best-in-class protections for California car buyers,” said Allen in a press release issued last October when the bill was signed into law by California Gov. Gavin Newsom. “It’ll make a real difference for consumers by making the car buying experience more fair and transparent.”
Under the new law, auto buyers can also take advantage of a first-in-the-nation return policy.
The law’s “right to cancel” provision creates a mandatory three-day cooling-off period during which consumers who buy or lease used vehicles under $50,000 can cancel the transaction.
Allen, in the 2025 press release, called the return period a chance for drivers to “catch issues” that may not have been apparent during a test drive or a visit to the showroom. Dealers will be required to offer a full refund in these cases, though they can charge a restocking fee.
The new law applies to light-duty vehicles under 10,000 pounds and to both new and used cars.
Consumer protection advocates applauded the legislation.
Nonprofit organization Consumers for Auto Reliability and Safety said on its website upon the law’s signing that the CARS Act would reduce “bait-and-switch” pricing tactics and empower buyers through the return policy, which organization head Rosemary Shahan called “a game-changer.”