Short Answer: The California Combating Auto Retail Scams (CARS) Act is a new state law that takes effect October 1, 2026.

It requires car dealers to advertise the total price of a vehicle, bans add-on charges that give the buyer no real benefit, and strengthens buyers’ right to cancel certain used-car purchases. If a dealer violates the CARS Act, California law gives you options to fight back and recover what you lost.

What Is the California CARS Act?

The CARS Act is Senate Bill 766, signed into law on October 6, 2025, and set to take effect October 1, 2026.

It’s formally known as the California Combating Auto Retail Scams Act. The law adds new consumer protections to the California Civil Code and updates parts of the Vehicle Code and Revenue and Taxation Code that govern how dealers sell and finance vehicles.

California lawmakers modeled the CARS Act on a similar rule the Federal Trade Commission tried to put in place nationwide. That federal rule was struck down by a federal appeals court in early 2025 before it ever took effect. California picked up where the FTC left off and passed its own version.

What the CARS Act Protects Consumers Against

Hidden and Misleading Pricing

Starting October 1, 2026, dealers must advertise the total price of a vehicle. That price has to include the dealer’s charges, not just a lowball number designed to get you in the door.

Under the CARS Act, it’s a violation for a dealer to misrepresent key facts about a sale. That includes the true cost of buying, financing, or leasing a vehicle, whether the car is actually available at the price advertised, and what a buyer is owed if the dealer can’t or won’t honor that price.

Junk Fees and Worthless Add-Ons

The CARS Act makes it illegal for a dealer to charge for an add-on product or service that gives the buyer no real benefit. This targets the practice of tacking on products like etching packages, paint protection, or other extras that pad the bill without adding value for the buyer.

Dealers also have to clearly disclose the total price and any add-on charges before a buyer signs. Charges that get buried in fine print or added at the last minute during financing don’t meet that standard.

Losing the Ability to Walk Away From a Bad Used-Car Deal

Before the CARS Act, dealers could charge buyers extra for the option to cancel a used-car purchase. The CARS Act does away with that and replaces it with a mandatory right to cancel that dealers can’t charge for and buyers can’t waive.

Starting October 1, 2026, buyers get 3 calendar days (or 400 miles driven, whichever comes first) to cancel the purchase or lease of a used vehicle priced at $50,000 or less. The dealer can charge a restocking fee, capped between $200 and $600, but must generally refund the rest within 48 hours and return any trade-in vehicle.

This gives buyers a real chance to undo a deal if they discover a problem shortly after signing, rather than being stuck the moment they drive off the lot. It doesn’t apply to new vehicles, private-party sales, auctions, or motorcycles.

Dealers Erasing the Paper Trail

The law also requires dealers to keep records of their advertisements and price communications for two years. That matters for consumers because it means there’s a documented trail if a dispute over pricing or disclosures ends up in court.

What Car Buyers Can Do If a Dealer Violates the CARS Act

If a dealer breaks these rules, California law already gives consumers legal tools to respond, and the CARS Act adds to them.

• Document everything. Save the original advertisement or online listing, screenshots, text messages, and every page of your purchase and financing paperwork.
• Compare the ad to the contract. Write down every difference between the price you were shown and the price you were charged, including any add-on you don’t remember agreeing to.
• Send a written demand. Under related California consumer protection laws, you may need to give the dealer written notice and a chance to fix the problem before filing a lawsuit.
• Talk to a consumer protection attorney. An attorney can tell you whether your situation supports a claim under the CARS Act, the Consumer Legal Remedies Act, or other California auto fraud laws, and what you may be able to recover.

Depending on the facts, a successful claim can lead to a refund, cancellation of the contract, or recovery of your losses. In many consumer protection cases, the dealer can also be required to pay the buyer’s attorney’s fees.

Talk to Consumer Action Law Group

If a dealer sold you a car using hidden fees, a bait-and-switch price, or add-ons you never agreed to, you may have a legal claim.

Consumer Action Law Group has spent years holding California dealers accountable for auto fraud and helping consumers recover what they’re owed.

Call (818) 254-8413 or fill out our contact form to talk to our team about your situation.