California's CARS Act Takes Effect: Used-Car Buyers Get a 3-Day Right to Cancel and Clearer Prices

If you are shopping for a car in California, a new law gives you more time to change your mind and more honest prices.

A new California law called the CARS Act took effect today, October 1, 2026. CARS stands for Combating Auto Retail Scams. The law, also known as Senate Bill 766, was written by State Sen. Ben Allen and signed by Gov. Gavin Newsom.

It targets common problems car buyers face, like surprise fees, add-ons they never wanted and prices that change once they sit down to sign.

"These practices will finally come to an end in California," Allen said, according to NBC Los Angeles.

A 3-day right to cancel many used-car purchases

The biggest change for shoppers is a new right to cancel a used-car purchase or lease. Under the law, a buyer can return a used vehicle if:

• The price is $50,000 or less
• The car has been driven no more than 400 miles since the sale
• It is returned in the same condition, apart from normal wear and tear

The window is three calendar days, starting the day after you sign. Dealers are allowed to charge a restocking fee, which is a charge for taking the car back, and the law limits how much they can charge.

This right covers used vehicles only. It does not apply to new cars, and there are some other exceptions, so ask the dealer before you sign whether your purchase qualifies.

Clearer prices and limits on junk add-ons

The law also changes how dealers show prices and sell extras:

• Clear prices up front. Dealers must clearly show a vehicle's price in ads and in their first conversations with shoppers, and give the price in writing when you ask in writing.
• No charging for useless add-ons. Dealers cannot charge for optional products that give you no benefit. One common example: an oil-change package sold with an electric car, which doesn't need oil changes.
• No misleading claims. Dealers cannot misrepresent things like the cost of the car, financing terms, whether a car is available, or whether you have been "pre-approved" for a loan.
• Records kept for two years. Dealers must keep ads, messages, contracts and cancellation requests for at least two years.

What this means for your wallet

A car is one of the biggest purchases most people make, and small add-ons can quietly add hundreds or thousands of dollars to the total. If you live in California, the new rules may help you keep more of your money. Here is how to use them:

• Ask for the total price in writing. Before you visit, send the dealer a written question asking for the full price. Under the law, they must answer in writing.
• Question every add-on. Ask what each extra product does, whether it is optional, and what the price is without it. You can say no to optional products.
• Use the three days wisely. After you buy a used car, drive it on your normal routes, have a trusted mechanic look at it and double-check your loan paperwork. Keep the mileage at or under 400 miles if you might return it.
• Get the paperwork. Ask for a copy of the cancellation terms and any restocking fee before you sign.
• Keep your receipts and messages. If something goes wrong, written records make it easier to file a complaint.

Even if you don't live in California, these tips can help. Asking for an "out-the-door" price in writing and saying no to add-ons you don't need are smart moves anywhere.