California Governor Gavin Newsom just signed the so-called CARS Act, short for California Combating Auto Retail Scams Act, a sweeping new law meant to crack down on misleading advertising, fake price quotes, and other shady dealership tactics. Supporters are calling it the most significant consumer protection bill for car buyers in decades. Critics, meanwhile, are calling it politics on four wheels.
At its core, the new law, Senate Bill 766, bans common dealership practices that have frustrated car shoppers for years—such as advertising a vehicle at one price and then stacking on surprise fees once you’re sitting in the finance office. The law requires all ads and quotes to show the real total cost of a vehicle, including mandatory dealer-installed accessories, add-ons, and finance charges. It also prohibits misrepresenting lease or loan terms and gives the state more power to penalize dealers who cross the line.
Consumer advocates applauded the move, saying it gives Californians a fairer shot at understanding what they’re signing. The Consumer Federation of America praised it as a landmark step to stop the bait-and-switch games that plague the car-buying process. And it’s true—auto retail has long had its share of bad actors, from inflated doc fees to bogus “market adjustments” that appear out of nowhere.
But there’s another side to this story. Most dealerships—the ones who do business the right way, the ones I endorse on the Car Pro Show—already disclose everything clearly and price their vehicles fairly. They’re not the problem. What often happens with laws like this is that the responsible dealers end up absorbing more paperwork and compliance costs while the true offenders keep finding new loopholes. For example, if a dealer can’t hide the cost of paint protection in the paperwork, they might simply bundle it into the online price instead.
The real question is how the law will be enforced. California regulators are already stretched thin, and without consistent oversight, the CARS Act could quickly become another well-intentioned law with no bite. Dealers who play fast and loose with pricing rarely change their ways just because a new statute tells them to—they change when the fines start landing and the lawsuits start flying. Or they simple accept the fines as just another cost of doing business. Some even just charge it to their advertising expense account, since that is what the fines are, right?
That said, this isn’t just political window dressing. Newsom’s signature puts California on the map as the first state with a broad, stand-alone law targeting retail auto scams. It may not fix the industry overnight, but it could make it harder for bad dealers to operate with impunity—and that’s a start. It also sends a message to other states: consumers deserve a level playing field at the dealership, not a shell game. That was my objective when I started the Car Pro Show 24 years ago.
Still, there’s no magic switch that can legislate ethics. Dealers who already operate with transparency and honesty—the ones we highlight every week on The Car Pro Show—don’t need a new law to do the right thing. They’ve built loyal customers through fairness, not fine print. The ones who should be worried are the few who depend on confusion and surprise to make a sale.
So, will the CARS Act actually help? Probably—at least a little. If regulators enforce it and consumers know their rights, it could clean up some of the murkier corners of the business. But if it ends up as another feel-good political move that looks good on a press release and quietly gathers dust, nothing much will change except the size of the rulebook. Either way, California just fired the first shot in what could become a national trend. The honest dealerships have nothing to fear. The dishonest ones? Their days of hiding behind the paperwork might, and I stress might, finally be numbered.
Photo Credit: JasonDoiy/Shutterstock.com.