SACRAMENTO – On Thursday, SB 766, also known as the CA CARS Act (Allen, 2025), takes effect to provide car shoppers in California with some of the strongest consumer protections in the nation, saving time, money, and lives.

“When the federal government fails to protect consumers, California is ready to step up,” said Senator Allen (D-Santa Monica). “For years, car shoppers have been mistreated and duped into purchasing unsafe vehicles or vehicles with add-ons and features they didn’t know about, saddling them with unnecessary debt and risking their lives on the road. These practices will finally come to an end in California.”

The car buying experience has consistently ranked near the top of consumer complaints across the nation. Between 2019 and 2023, the Federal Trade Commission received 162,000 complaints from consumers about unfair and deceptive sales practices. A common complaint is the misrepresentation of add-on services or features that are optional for purchase. In FTC vs. North American Automobile Services, it was discovered that 83 percent of consumers had hundreds to thousands of dollars’ worth of add-on chargers that they were not aware of.

A recent car shopper, David Lappen, shared his bizarre story when trying to purchase an electric vehicle. “Recently, while shopping for a used electric vehicle, we were shocked to see the advertised price padded by $5,000 for dealer ‘options’ such as catalytic converter etching and free oil changes, which do not apply to EVs. The dealer said he couldn't make any money selling at the advertised price, so it was clear that the used car dealership was falsely advertising an unattainable low price.”

Under the new law, dealers will be prohibited from offering these add-ons that offer zero value to the customer. They will also be required to provide the full price of the vehicle up front and disclose that all add-ons are optional for purchase.

Anthony Vento’s life was threatened by a Kia dealership that sold him a used with a defective airbag system. “As someone who was sold a so-called certified used 2019 Kia Soul by an authorized Kia dealership that informed me in writing they had checked the safety recall status — only to soon discover it had an unrepaired safety recall defect that almost killed me —I know firsthand how devastating the consequences can be when car dealers mislead consumers about the safety of used cars.

The California CARS Act will give California's used car buyers a new 3-day window of opportunity to check for unrepaired safety recalls and take unsafe cars back to the dealership for a refund. That can be a lifesaver.”

The guaranteed 3-day return policy will provide the opportunity to get the vehicle professionally inspected and return the vehicle for a full refund if needed. Dealers are permitted to charge a reasonable restocking fee, and the car cannot be driven more than 400 miles before being returned.

Economists have estimated the CARS Act will save California car buyers $234 million annually, and an additional 8.5 million hours of time that would otherwise be spent haggling and navigating the difficult car-buying process.

What Others Are Saying

“While the Trump Administration is letting predatory car loan companies off the hook for cheating Americans, states like California are leading the way to protect car buyers,” said Senator Elizabeth Warren (D-Mass.). “The CARS Act is simple: dealers have to be honest and up front about car prices. When you buy a car, you should know what you’re getting, and you shouldn’t be forced to pay junk fees.”

"We applaud Senator Allen's leadership in championing this landmark first-in-the-nation consumer protection legislation, and are thrilled that Governor Newsom signed it into law," said Rosemary Shahan, President of the non-profit consumer organization Consumers for Auto Reliability and Safety, which led the coalition in support of SB 766. "The California CARS Act is the most sweeping reform of protections for car buyers since the Car Buyers Bill of Rights was enacted in 2005. The 3-day cooling off period for used car buyers promises to be a game-changer."

“California's CARS Act is a significant step forward for California consumers and for an industry that has been allowed to get away with outrageous sales tactics for far too long,” said Ted Mermin, director of the California Low-Income Consumer Coalition. “In the past, when you ask a car dealer how much a car costs, you get a three-hour wait in an office.  Starting on Thursday, you’re going to get a direct answer.”

“The California Cars Act will help empower California car buyers to avoid being taken for a ride when they buy a new or used car,” said Robert Herrell, Executive Director of the Consumer Federation of California.