California lawmakers made major changes to the state\u2019s car-buying rules this year, including a controversial rewrite of the state law that allows buyers to get their money back if they are sold a defective vehicle and a right to return a used vehicle within three days.<\/p>\n
After an intense lobbying push this year from automobile companies, dealers and consumer groups, more legislative battles over California vehicle purchases could follow in 2026. Sky-high car prices<\/a> show no signs of falling, and a Republican-led Congress<\/a> and the Trump administration<\/a> have sought to thwart Newsom\u2019s goal<\/a> of having 100% of new cars sold in California be zero-emission by 2035.<\/p>\n Sen. Ben Allen<\/a>, a Democrat representing the El Segundo area, said he expects California\u2019s Democratic-controlled Legislature will likely push back against national Republicans\u2019 attack on California\u2019s vehicle policies in some form next year, though he said it wasn\u2019t yet clear how.<\/p>\n \u201cWe\u2019re very committed to this path, so stay tuned, but clean air is a priority for our state,\u201d said Allen, who chairs the Senate\u2019s Select Committee on Transitioning to a Zero-Emission Energy Future.<\/p>\n Keep up with LAist.<\/p>\n If you’re enjoying this article, you’ll love our daily newsletter, The LA Report. Each weekday, catch up on the 5 most pressing stories to start your morning in 3 minutes or less. <\/p>\n In the meantime, Gov. Gavin Newsom signed Allen\u2019s Senate Bill 766<\/a>, creating a first-in-the-nation policy that allows a buyer to return a used vehicle for a full refund within three days if the purchase price was less than $50,000. Dealers can charge a restocking fee.<\/p>\n The law, which takes effect in October, also contains other protections for buyers intended to prevent them from getting suckered.<\/p>\n Car dealers will have to tell a potential buyer \u2014 including in advertisements and initial written communications \u2014 the actual price of a vehicle instead of an unrealistic advertised price. Potential buyers will also have to be informed of the full financing costs and lease terms.\u00a0<\/p>\n The law also prohibits dealers from charging for add-ons that have no benefit to the buyer, such as free oil changes for electric vehicles \u2014 which don\u2019t need oil changes.<\/p>\n \u201cThat is a huge deal,\u201d said Rosemary Shahan of Consumers for Auto Reliability and Safety<\/a>, which championed the bill. \u201cIt\u2019s historic. It\u2019s going to make cars more affordable.\u201d<\/p>\n Allen said he came up with the idea for the bill after shopping for a used car in 2024. He said he wanted to see what it was like trying to buy a used car in California and didn\u2019t tell the various dealerships he visited that he was a state senator.<\/p>\n \u201cI was kind of shocked by the hustle and the extent to which prices were quoted online and that ended up not really being truthful,\u201d he said.<\/p>\n He ended up buying a 2021 Ford Mustang Mach-E, an electric vehicle.<\/p>\n Newsom blocked document fee increase<\/p>\n Most bills take effect immediately the year after they are signed, but lawmakers delayed the implementation of Allen\u2019s bill until October to give dealers time to change their paperwork, amend their contracts and change their signs to meet the new law\u2019s requirements.<\/p>\n Brian Maas, president of the California New Car Dealers Association, said the law should make buying a used car more transparent and easier for consumers.<\/p>\n \u201cThe bill certainly is a net positive in terms of more transparency about the total price and advertising,\u201d he said.<\/p>\n But he said the new law \u201cclearly imposed more responsibility on dealers,\u201d which is why Maas said his group was extremely frustrated Newsom vetoed its bill that would have allowed dealers to raise document-processing fees by $175.<\/p>\n Senate Bill 791<\/a> would have raised the fees dealers can charge to process Department of Motor Vehicles and other paperwork from the current cap of $85 to up to 1% of the purchase price, capped at $260.<\/p>\n Maas said dealers were frustrated by Newsom\u2019s veto message<\/a> which said the fee increase wasn\u2019t necessary because the state had imposed \u201cno new state requirements\u201d on car dealers.<\/p>\n Maas said it was \u201cespecially frustrating that the veto message somewhat cavalierly said there are no new state requirements when the governor signed just such requirements a week earlier.\u201d<\/p>\n Before the veto, SB 791 passed the Legislature overwhelmingly and with bipartisan support. The California New Car Dealers Association has donated at least $3 million to legislators since 2015, according to the Digital Democracy database<\/a>.<\/p>\n Maas said there are so many forms car buyers must fill out, almost all of them stemming from a law the Legislature passed, they\u2019re getting to be like click-through agreements on websites that everyone just agrees to without actually reading.<\/p>\n \u201cYou shove form after form after form in front of consumers,\u201d he said. \u201cConsumers just tune it out, turn it off, and say, \u2018You know what? I just want to know what my monthly payment is, what\u2019s the interest rate, what the total price of the car is. And then let\u2019s go. Why do I have to sit in here for a half hour or an hour and fill out all these forms?\u2019 \u201d<\/p>\n Consumers face a watered-down lemon law<\/p>\n Newsom also signed Senate Bill 26<\/a>, a bill that allows car manufacturers to opt out of changes to the state\u2019s lemon law that gives consumers a right<\/a> to get their money back if they buy a defective vehicle \u2014 sometimes referred to as a \u201clemon.\u201d<\/p>\n The result is that California car buyers have different legal protections under the state\u2019s lemon law depending on which brand they buy.<\/p>\n The bill Newsom signed was in response to a law lawmakers hastily<\/a> passed at the end of the 2024 legislative session, watering down the state\u2019s 55-year-old landmark lemon law. Some<\/p>\n auto companies, namely GM and Ford, were being sued so often for allegedly selling so many lemons that state courts were clogged with lawsuits.<\/p>\n The companies and some attorney groups persuaded lawmakers and Newsom to pass legislation in 2024 that shrank the length of time a car buyer could sue under the lemon law to just six years instead of the entire life of a vehicle\u2019s warranty<\/p>\n Last year\u2019s legislation also puts more onus on car owners to initiate claims, not auto companies.<\/p>\n But other companies that don\u2019t get sued as often for selling defective vehicles, such as Toyota and Honda, opposed the rule change. Those companies said the new law didn\u2019t give them time to prepare their best defense<\/p>\n Newsom ended up reluctantly signing the 2024 bill, but he urged<\/a> the Legislature to come back with a new bill in 2025 that would allow companies to opt out of the changes. SB 26 passed overwhelmingly and Newsom signed it.<\/p>\n