California car buyers are about to get a set of new protections that could significantly change how vehicles are advertised, priced, and sold at dealerships.
Beginning October 1, 2026, California’s Combating Auto Retail Scams Act, created by Senate Bill 766, will require dealers to provide a vehicle’s “total price” in advertising when an advertisement refers to a specific vehicle or gives a monetary amount or financing term for that vehicle.
The same total price must also appear in the dealer’s first written communication with a consumer about a specific vehicle or financing terms.
The law also introduces a major change for used-car shoppers. Buyers and lessees of qualifying used vehicles priced at $50,000 or less will receive a three-day right to cancel the transaction, subject to conditions including a mileage limit and a potential restocking fee.
For California consumers, that means the traditional process of negotiating a vehicle, discovering additional charges late in the transaction, and having little time to reconsider is about to change.
California Will Require Dealers to Show the Real Vehicle Price Up Front
One of the most important changes concerns how dealers advertise vehicles. Under SB 766, if a California dealer’s advertisement references a specific vehicle for sale, the advertisement must disclose the vehicle’s total price. The requirement also applies when an advertisement gives a monetary amount or financing term for a specific vehicle.
The rule goes beyond traditional advertised pricing. California defines “total price” as the total sale price of the vehicle, subject to specific statutory exclusions.
It includes a dealer price adjustment and the cost of items installed on the vehicle when the vehicle is advertised or communicated to the consumer. The advertised total price also cannot be reduced by deducting a rebate.
That last point could make a noticeable difference when shoppers compare vehicles online. A dealer cannot advertise a vehicle at a price that only applies after a rebate that is unavailable to every buyer and then present that reduced figure as the vehicle’s total price.
For example, if a dealer advertises a specific vehicle with a dealer-installed accessory or dealer price adjustment, those amounts generally have to be reflected in the required total price. A rebate cannot simply be deducted from that number to create a lower advertised total.
The law does not mean every charge associated with buying a vehicle must be included in the advertised total. California’s statutory definition excludes specified taxes, fees, and other charges covered by existing vehicle advertising rules.
The new requirement also follows consumers into the early stages of an online shopping conversation.
If a shopper contacts a dealer about a specific vehicle, the dealer’s first written communication that references that vehicle or any monetary amount or financing term must include the total price. The statute specifically requires the total price to appear at least once in the dealer’s first response concerning that vehicle.
That means a shopper who sends an email asking, “How much is this particular SUV?” should no longer have to exchange multiple messages simply to obtain the vehicle’s required total price. The law also addresses financing discussions.
When a dealer makes a written representation about a monthly payment for a specific vehicle, the dealer must disclose the total amount the consumer would pay if all payments were made as scheduled.
If the calculation assumes a down payment or trade-in, the amount of that consideration must also be disclosed. If a dealer compares payment options and emphasizes a lower monthly payment, the written representation must state that lower monthly payments can increase the total amount paid.
That provision is particularly relevant as longer auto loans become common. A $600 monthly payment can sound considerably more attractive than a $750 payment, but the lower monthly figure may result from a longer loan term.
California’s new disclosure requirement is designed to make the total financial commitment more visible during the shopping process.
Used-Car Buyers Get Three Days to Change Their Minds
The other major change is even more unusual. Starting October 1, a California dealer generally cannot sell or lease a qualifying used vehicle at retail for $50,000 or less without providing the buyer or lessee with a three-day right to cancel.
This is not the same as an unlimited return policy. The vehicle cannot have been driven more than 400 miles between the execution of the transaction and the time the buyer attempts to cancel. The law also permits the dealer to charge a restocking fee.
The restocking fee is set at 1.5% of the vehicle’s sale price, with a minimum of $200 and a maximum of $600. If the dealer charged the customer a shipping fee to transport the vehicle, the law provides an alternative treatment under certain circumstances.
There is another mileage-related charge that shoppers need to understand. If the vehicle has been driven more than 250 miles, the dealer may charge an additional $1 for each mile above 250, up to a maximum additional charge of $150. That is separate from the basic restocking-fee structure.
So a buyer who drives 300 miles before returning a qualifying vehicle could potentially face the statutory restocking fee plus an additional $50 mileage charge.
The three-day period is also defined in the law. Generally, it begins on the calendar day after the purchase or lease is executed and consists of three calendar days. If the third day falls when the dealership is closed to the public, the period extends to the next day the dealership is open.
The policy does not apply to every vehicle transaction. The statute specifically defines the covered used vehicles and excludes motorcycles from the used-vehicle definition for this provision.
The California DMV also says the law applies to licensed California dealers selling or leasing light-duty vehicles under 10,000 pounds, while identifying exemptions including wholesale transactions, fleet sales, and certain commercial purchases.
The new law also does not create a three-day cancellation period for new cars. California’s existing rules have historically provided limited cancellation options for certain used-car transactions, but SB 766 replaces that framework with the new three-day right for qualifying transactions beginning October 1.
What California Buyers Should Do Differently
The new rules could make online vehicle shopping considerably easier because shoppers will have more information before walking into a dealership.
Before visiting a dealer, buyers should save screenshots or copies of advertisements for specific vehicles. If the advertised price changes later, having the original advertisement can help establish what was presented to the consumer.
Buyers should also pay attention to whether an advertised price reflects a rebate. Under SB 766, the required total price cannot simply deduct a rebate. Rebates and incentives can still be disclosed separately under the law, but they do not replace the required total-price disclosure.
For used vehicles, the three-day cancellation period creates an opportunity to perform additional checks after signing.
A buyer could use the period to have the vehicle inspected by an independent mechanic, verify the vehicle’s condition, and review the paperwork carefully. The right to cancel does not eliminate the importance of doing research before signing, however. The buyer still needs to comply with the mileage and other statutory requirements.
The dealer must also provide a specific disclosure concerning the three-day cancellation right, and California law requires prominent notices explaining the new protection.
SB 766 also imposes record-retention requirements on dealers. Records supporting compliance, including advertisements and communications involving vehicle pricing, must be retained for two years under the new framework.
The changes arrive at a time when vehicle buyers are increasingly shopping online before entering a dealership. That makes transparent pricing particularly important.
A shopper can compare dozens of vehicles from different dealers, but those comparisons become much less useful when advertised prices are calculated using different assumptions about rebates, add-ons, or dealer adjustments. California’s new system attempts to make the starting point more consistent.
For dealers, the law means advertising, internet inquiries, and sales communications will require additional attention. For consumers, it means the price displayed for a specific vehicle should provide a clearer picture of what the vehicle itself costs, while qualifying used-car purchases will come with a limited opportunity to reverse the transaction.
The three-day rule represents one of the most notable changes because it gives eligible California used-car buyers a statutory opportunity to reconsider their purchase after leaving the dealership. Previously, buyers generally did not have this type of post-sale cancellation period.
There are important limits to keep in mind. The protection applies only to qualifying used vehicles priced at $50,000 or less, and the vehicle must remain within the statutory mileage limit. Dealers may also charge the permitted restocking fee and certain additional fees based on mileage.
Starting October 1, California will therefore have a very different set of rules governing the early stages of a vehicle purchase.
Dealers will have to put the required total price into advertisements and initial written communications, financing discussions will require greater disclosure of the total amount paid, and qualifying used-car buyers will receive a three-day cancellation right.
For anyone shopping for a car in California this fall, the practical steps are straightforward. Keep a copy of the advertisement, verify the total purchase price, review the financing terms carefully, and understand the requirements for the three-day cancellation right before signing the paperwork.
The new law does not eliminate the need for careful car shopping, but it changes how much information California dealers must put in front of buyers before and immediately after a deal is made.
