What California's CARS Act requires of dealers: the requirements, one by one

In short: California's Combating Auto Retail Scams Act has been operative since October 1, 2026. It regulates what a dealer advertises, what it says about financing, how it sells add-ons, when a used-car buyer can cancel, and what records it keeps. Here is each requirement in plain English, with the Civil Code section.

The CARS Act, Senate Bill 766, was signed on October 6, 2025 and became operative on October 1, 2026. It applies to licensed California dealers in retail sales and leases of light-duty vehicles, with exemptions the DMV's implementation memo lists, such as wholesale, fleet and auction sales. It is a California law for California dealers, enforced through existing state remedies and DMV licensing action.

Requirement 1: No misrepresentations (Civil Code 1784.40)

A dealer may not misrepresent a list of material facts. The list includes the costs or terms of purchasing, financing or leasing; add-ons; whether a consumer has been or will be preapproved or guaranteed for any product, service or term; and information on or about a consumer's application for financing. The last item puts the credit application inside the statute.

Requirement 2: Total price, everywhere it matters (1784.41)

The total price must be clearly and conspicuously disclosed in any advertisement that references a specific vehicle or states a monetary amount or financing term, and in the first written communication with a consumer that references a specific vehicle or any monetary amount or financing term. The DMV memo lists email, text message, quote and credit application as examples of first written communications. Total price means the total sale price excluding the government taxes, fees and charges described in Vehicle Code 11713.1(e), including dealer price adjustments and installed items, with no deduction for rebates. Keep a copy of that first communication for at least two years.

Requirement 3: Add-ons disclosed as optional (1784.41 and 1784.42)

When making a written representation about an add-on during negotiation, the dealer must disclose in writing, at least once, that the add-on is not required and the vehicle can be bought or leased without it. Per the DMV memo, the optional nature is disclosed both verbally and in writing in at least 12-point type. A dealer may not charge for add-ons that provide no benefit to the consumer; the statute's examples include oil changes for electric vehicles and nitrogen tire fills below 95 percent purity.

Requirement 4: A 3-day right to cancel on many used vehicles (1784.43)

For many used vehicles priced at $50,000 or less, the consumer gets a three-day right to cancel, subject to mileage and condition limits and a separate, titled disclosure. It replaces the earlier optional contract cancellation agreement.

Requirement 5: Records for two years (1784.44)

Dealers must keep specified records for two years: advertisements, pricing communications, deal documents, add-on documentation and cancellation records.

The checklist

1. Every ad that names a vehicle, a dollar amount or a financing term shows the total price.
2. The first written communication about a specific vehicle shows the total price, and a copy is kept.
3. Staff statements about preapproval and application status are accurate and consistent.
4. A written "add-ons are optional" disclosure is in the deal flow, in 12-point type, and in the file.
5. The add-on menu has been checked against the no-benefit examples.
6. The three-day cancellation disclosure is in use on eligible used vehicles.
7. A two-year retention schedule covers ads, communications, deal files, add-on documents and cancellations.

This explainer is general information about a California statute, not legal advice. The summary is not complete; talk to your counsel about how SB 766 applies to your store.

Sources: SB 766 bill text, California Legislative Information; California DMV, OLIN 2026-10.

About the author

Written by the DealSafe team. DealSafe is the dealer compliance program founded by Dallas Tyrrell and run on the founder's own rooftops at Tyrrell Auto Centers, Wyoming's oldest dealership group. Questions and corrections: support@dealsafe.com.

See also

California's CARS Act: what changed on October 1, 2026 · Secure Customer Intake · Enforcement Watch · All guides and news