Back in August, I told you California was preparing to change the rules for buying a vehicle. That change arrived Oct. 1, when the California Combating Auto Retail Scams Act became operative. Now the question moves from what dealerships must prepare for to what consumers should expect when they shop.
According to the California Department of Motor Vehicles, the law adds protections involving advertised prices, financing disclosures, optional products and qualifying used-car returns. It affects both new and used vehicles, although the provision getting the most attention—the three-day right to cancel—applies only to qualifying used vehicles.
Buyers and lessees of covered used vehicles priced at $50,000 or less now receive an automatic three-day cancellation right. You do not have to buy that protection separately, and you do not have to prove something is wrong with the vehicle. However, this is not permission to borrow a pickup for a weekend move and return it Monday with a thank-you note.
Under the statute, the three calendar days begin the day after the contract is signed. If the final day falls when the dealership is closed, the deadline extends to its next open day. The vehicle must be personally returned during business hours, with no more than 400 miles driven since the agreement was executed. It must generally be in its original condition, allowing reasonable wear and tear and mechanical problems that appeared after delivery and were not caused by the customer.
Returning it can cost money. Dealers may charge a restocking fee of 1.5% of the sale price, with a $200 minimum and $600 maximum. They may also charge $1 per mile beyond 250 miles, up to another $150. A $30,000 vehicle returned after 300 miles could therefore carry a $500 charge. Read the separate cancellation disclosure before signing, and know your exact deadline.
New vehicles do not receive this cooling-off period. Neither do private-party purchases, motorcycles or certain other excluded transactions. Buying a new car and discovering it will not fit in your garage remains an excellent argument for measuring the garage first.
For shoppers generally, the pricing requirements may matter even more. Dealers must disclose a vehicle’s total price in covered advertisements and their first written response concerning that vehicle. That price includes dealer markups and equipment already installed. Taxes and certain permitted charges can remain separate, and rebates must be disclosed separately rather than subtracted from the required total price.
The law also requires a fuller financial picture when dealers make written monthly-payment representations during negotiations. Customers must receive the total of scheduled payments and disclosure of any assumed down payment or trade-in contribution. A comfortable monthly payment can conceal a very uncomfortable overall cost.
Optional products remain available. Written representations about add-ons must disclose that customers can purchase or lease without them, and dealers cannot charge for products that provide no benefit. The DMV specifically points to oil-change plans for electric vehicles. Apparently, common sense occasionally needs its own legislation.
My advice is to save the advertisement, written price quote and cancellation paperwork, compare the complete deal, and arrange an independent inspection before buying a used vehicle. A return right is valuable, but it should supplement your homework.
For dealers, ComplyAuto’s compliance guidance describes changes reaching advertising systems, employee practices, forms and recordkeeping. Those obligations create real work. My view is that honest dealers also stand to benefit when competitors must show realistic prices.
Will other states follow? That remains an open question. California’s law does not extend these rights nationwide, and it is too early to judge its effect on prices, returns or transaction times. For now, buyers have new protections, dealers have new responsibilities, and the rest of us have a real-world test worth watching.