All Roll Calls
Yes: 183 • No: 23
CaliforniaSB 7662025-2026 Regular SessionSenateWALLET
California Combating Auto Retail Scams (CARS) Act.
Sponsored By: Benjamin Allen (Democratic)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 3 benefits, 1 costs, 3 mixed.
Three-day right to cancel used cars
Beginning October 1, 2026, if you buy or lease a used car priced $50,000 or less, you have three days to cancel for any reason. The right ends if you drive more than 400 miles before you cancel. Dealers must post a large 36‑point in‑store notice and put a clear notice on the first page of your contract. Dealers must also give you a separate “3‑Day Right to Cancel” form. If you cancel, the dealer may charge a restocking fee. Refunds are due within 48 hours, or two business days after your payment is verified. The dealer must return your trade‑in, or pay you the highest of the agreed value, the dealer’s sale price, or fair market value, minus any payoff owed. Dealers cannot block or delay a valid cancellation, overcharge fees, or withhold your downpayment or trade‑in.
Two-day used-car return option
Until Oct 1, 2026, dealers must offer a separate two‑day cancellation option on many used cars under $40,000 (not motorcycles or RVs). The option’s price is capped at $75, $150, $250, or 1% for $30,000–$39,999. If you return the car on time, restocking fees are capped at $175, $350, or $500, with higher caps for some prior lessees. You must meet return mileage and item rules. Dealers must refund no later than the second day after you cancel and follow trade‑in and downpayment return rules. Dealers must post an 8‑by‑10‑inch in‑store notice that there is no general cooling‑off period and that the two‑day option is available on many used cars.
Stronger lease paperwork and notices
Lease contracts must be in writing and include federal lease (Regulation M) information and an Itemization of Gross Capitalized Cost. Dealers cannot get your signature on a contract with blank spaces and must give you a signed copy at signing and at delivery. Contracts must include bold notices and a GAP liability notice when it may apply. Until Oct 1, 2026, current lease rules apply. Starting Oct 1, 2026, an updated section with the same core protections is operative.
Truthful pricing and add-on protections
Dealers must show the total price in ads and in their first written reply about a specific car. If they quote a monthly payment, they must show the total you will pay and any assumed down payment or trade‑in. If they highlight a lower monthly payment, they must warn it often raises the total cost. Add‑ons are optional. Dealers cannot sell add‑ons that give no real benefit, and must pay add‑on providers within 10 days so your coverage starts. Dealers cannot misrepresent price, financing, trade‑ins, add‑ons, preapproval, or other key facts. These rules take effect October 1, 2026.
Dealers must keep two-year records
Starting Oct 1, 2026, dealers must keep two years of records that prove they followed the law. Keep ads and written price offers, purchase orders, finance and lease papers, add‑on contracts and payments, cancellation and refund records, trade‑in returns, and written complaints and responses. Records can be in any legible business form. Not keeping them is a violation.
Clearer finance contracts and small fees
Finance contracts must clearly explain how prepayment refunds are figured, including the method for any unearned finance charge. If a simple‑interest deal has a minimum finance charge, the amount or method must be stated. Non‑actuarial refunds need a bold warning. Conditional sale contracts must include Regulation Z disclosures and an itemized amount financed, including an EV Charging Station line. Sellers cannot charge an application fee. But until Oct 1, 2026, they may charge up to $15 for a returned check if the contract allows it. Until Oct 1, 2026, contracts must also show “new” or “used” in a red box on the face of the contract.
Sales tax excludes used-car returns
Sales tax rules exclude the portion of a used‑car sale that is later returned to the buyer. Until Oct 1, 2026, they also exclude the price paid for a used‑car cancellation option. Beginning Oct 1, 2026, they exclude any authorized restocking fees instead. This lowers the taxable sales price dealers must report on these amounts.
Sponsors & Cosponsors
Sponsor
Benjamin Allen
Democratic • Senate
Cosponsors
Ash Kalra
Democratic • House
Henry Stern
Democratic • Senate
Roll Call Votes
Senate vote • 9/11/2025
Item 71 — Senate SFLOOR
Yes: 30 • No: 8
House vote • 9/10/2025
Item 34 — Assembly AFLOOR
Yes: 76 • No: 1
legislature vote • 7/16/2025
Vote in CX32
Yes: 11 • No: 0
legislature vote • 7/1/2025
Vote in CX13
Yes: 9 • No: 1
Senate vote • 6/2/2025
Item 221 — Senate SFLOOR
Yes: 27 • No: 9
legislature vote • 5/23/2025
Vote in CS61
Yes: 5 • No: 1
legislature vote • 5/19/2025
Vote in CS61
Yes: 5 • No: 0
legislature vote • 4/29/2025
Vote in CS53
Yes: 11 • No: 0
legislature vote • 4/8/2025
Vote in CS59
Yes: 9 • No: 3
Actions Timeline
Chaptered by Secretary of State. Chapter 354, Statutes of 2025.
10/6/2025SenateApproved by the Governor.
10/6/2025legislatureEnrolled and presented to the Governor at 11 a.m.
9/22/2025legislatureAssembly amendments concurred in. (Ayes 30. Noes 8. Page 2894.) Ordered to engrossing and enrolling.
9/11/2025SenateIn Senate. Concurrence in Assembly amendments pending.
9/10/2025SenateRead third time. Passed. (Ayes 76. Noes 1. Page 3169.) Ordered to the Senate.
9/10/2025HouseOrdered to third reading.
9/5/2025HouseRead third time and amended.
9/5/2025HouseRead third time and amended.
8/29/2025HouseOrdered to third reading.
8/29/2025HouseRead second time. Ordered to third reading.
8/18/2025HouseRead second time and amended. Ordered to second reading.
7/17/2025HouseFrom committee: Do pass as amended. (Ayes 11. Noes 0.) (July 16).
7/16/2025HouseFrom committee with author's amendments. Read second time and amended. Re-referred to Com. on P. & C.P.
7/14/2025HouseFrom committee: Do pass and re-refer to Com. on P. & C.P. (Ayes 9. Noes 1.) (July 1). Re-referred to Com. on P. & C.P.
7/2/2025HouseCoauthors revised.
7/2/2025HouseFrom committee with author's amendments. Read second time and amended. Re-referred to Com. on JUD.
6/26/2025HouseFrom committee with author's amendments. Read second time and amended. Re-referred to Com. on JUD.
6/13/2025HouseJune 17 hearing postponed by committee.
6/11/2025HouseReferred to Coms. on JUD. and P. & C.P.
6/9/2025HouseIn Assembly. Read first time. Held at Desk.
6/3/2025HouseRead third time. Passed. (Ayes 27. Noes 9. Page 1377.) Ordered to the Assembly.
6/2/2025SenateRead second time. Ordered to third reading.
5/27/2025SenateRead second time and amended. Ordered to second reading.
5/23/2025SenateFrom committee: Do pass as amended. (Ayes 5. Noes 1. Page 1212.) (May 23).
5/23/2025Senate
Bill Text
Chaptered
10/6/2025
Enrolled
9/16/2025
Amended Assembly
9/5/2025
Amended Assembly
8/29/2025
Amended Assembly
7/17/2025
Amended Assembly
7/14/2025
Amended Assembly
6/26/2025
Amended Assembly
6/13/2025
Amended Senate
5/23/2025
Amended Senate
5/1/2025
Amended Senate
4/10/2025
Introduced
2/21/2025