A new used-car law took effect in California on Thursday, Oct. 1, allowing consumers to return certain used vehicles within a three-day window.
Senate Bill 766, also known as the California Combating Auto Retail Scams (CARS) Act, adds new consumer protections for people buying, financing, or leasing used vehicles in the Golden State. The legislation, signed into law by Gov. Gavin Newsom in October 2025, aims to curb deceptive sales practices by car dealerships and increase transparency around vehicle pricing, financing terms, and optional add-on products and services.
Senator Allen (D-Santa Monica), the legislation's author, touted the law as a win for California consumers.
“For years, car shoppers have been mistreated and duped into purchasing
unsafe vehicles or vehicles with add-ons and features they didn’t know about, saddling them with unnecessary debt and risking their lives on the road. These practices will finally come to an end in California," Allen said in a Sept. 30 written statement.
Here's a look at key provisions in California's new used-car law, including how the three-day return window works and what other protections are available to consumers.
Mandatory three-day return window
Under the new law, consumers who buy or lease a used car valued at $50,000 or less get an automatic 3-day right to cancel the contract, provided they meet certain criteria.
Before SB 766, consumers could return a used car in California, but they had to explicitly buy a separate 2-day cancellation option contract at the time of sale, which applied only to cars valued at less than $40,000.
The 3-day right to cancel does not apply to the following cases:
- New cars
- Private party sales
- Motorcycles
- Off-highway vehicles
- Recreational vehicles
- Vehicles sold as part of a fleet sale
Per the new law, the three-day window begins the day after the consumer signs the contract. To exercise the 3-day right to cancel, consumers must return the vehicle and submit an official cancellation notice before the third day ends.
To be eligible for cancellation, consumers must meet certain requirements, including:
- The car must be in its original delivery condition.
- The vehicle must have been driven fewer than 400 miles since purchase.
Dealers may refuse a return if the vehicle does not meet the conditions outlined in the cancellation agreement.
Consumers who cancel a purchase may be charged a restocking fee.
When a cancellation is approved, dealers must provide a full refund, including sales tax, registration fees, and the value of any down payment or trade-in vehicle.
Other consumer protections created by legislation
Under the new law, dealerships must provide consumers with clear disclosures about vehicle prices and any add-on products or services sold with a vehicle.
The law prohibits dealers from making misleading statements about vehicle prices, financing or lease terms, available inventory, and other material aspects of a vehicle transaction. Dealers also must clearly disclose the total price of a vehicle up front and other key information to help consumers make informed purchasing decisions.
In addition, the law places new restrictions on add-on products and services. Dealers cannot charge consumers for certain add-ons that provide no benefit to the buyer.
SB 766 also adds new recordkeeping requirements for dealerships, which must now keep records for two years showing they complied with state pricing law, disclosure, and sales requirements.
This article originally appeared on Palm Springs Desert Sun: New California used-car law takes effect. What to know
