California is changing the rules for buying a used car. The California Combating Auto Retail Scams Act, usually called the CARS Act or SB 766, was signed into law in October 2025 and takes effect on October 1, 2026. It introduces clearer pricing disclosures, new rules for optional add-on products, and a 3-day right to cancel for many used vehicle purchases. This article explains the main points in plain English so you know what to expect when you buy a used car in San Diego or anywhere else in California.
This is general information, not legal advice. Always read the disclosures your dealer provides, and check the official bill text on the California Legislative Information website or speak with a qualified professional if you have questions about your situation.
Buying a car involves many numbers: the price, taxes, fees, add-on products, trade-in values and financing terms. The CARS Act is designed to make those numbers clearer and to give buyers a short window to change their minds on qualifying used vehicle purchases. For shoppers, that means more transparency before signing and more peace of mind afterward.
According to published summaries of the law, the cancellation right applies to used vehicles sold or leased by dealers with a price of $50,000 or less. It does not apply to new vehicles; California still has no general cooling-off period for new cars. Other transactions, such as auction sales and certain commercial or fleet purchases, are also excluded.
Buyers generally have three calendar days to cancel. The period begins the day after the contract is signed. If you are considering cancelling, act quickly and follow the instructions in the disclosure the dealer gives you.
The right to cancel comes with conditions. Summaries of the law describe these key limits:
If you cancel, the dealer must cancel the contract, return your trade-in vehicle or its value, and refund your down payment minus any allowed restocking fee, within the time limits set by the law.
For qualifying used vehicle sales, dealers must provide a separate written disclosure explaining the right, titled “3-Day Right to Cancel Used Car Purchase or Lease,” and a notice on the first page of the contract. Read this document carefully. It tells you exactly how to exercise the right with that dealer.
Another major change is how prices are communicated. The CARS Act requires dealers to clearly disclose the total price of a vehicle in advertisements, in the first written communication with a buyer and during negotiations. The total price generally includes the vehicle’s sale price plus dealer-installed items and certain charges, but not items such as taxes and government fees. If a dealer quotes a monthly payment, it must also disclose the total amount you would pay over time and the assumptions behind the quote, such as down payment and trade-in.
For buyers, this makes it easier to compare vehicles and offers without surprises at the signing table.
Add-ons are extra products or services sold with a vehicle, such as service contracts, protection packages or accessories not installed by the manufacturer. Under the CARS Act:
If you are offered an add-on, ask what it covers, what it costs, and whether you can buy the car without it. The answer to the last question should always be yes.
The law also prohibits dealers from misrepresenting important facts, such as the cost or terms of financing, whether a transaction is a lease or a purchase, the availability of a vehicle at an advertised price, or the status of a financing application. Dealers must keep records showing they followed these rules for two years.
Before the CARS Act, California required dealers to offer a paid “contract cancellation option” on many used vehicles under $40,000. SB 766 replaces that older option with the new 3-day right to cancel for qualifying used vehicles priced at $50,000 or less, beginning October 1, 2026.
The main provisions take effect on October 1, 2026.
No. It applies to qualifying used vehicles. California does not have a general cooling-off period for new vehicles.
For qualifying used vehicles, the law allows cancellation for any reason within the time limit, subject to conditions such as the mileage limit, vehicle condition and a possible restocking fee.
The official text of SB 766 is available on the California Legislative Information website.
New rules or not, the best way to buy a used car is to take your time, ask questions and understand every document. At Bancroft Auto Sales in San Diego, we are happy to walk you through the Buyers Guide, pricing and paperwork. Browse our used cars, apply for financing online, or send us a message with any questions.