What is on the California CARS Act checklist for used-car dealers?
Quick answer
Do you sell used cars in California? Since October 1, 2026, the CARS Act requires a 3-day right to cancel on used vehicles priced at $50,000 or less (Civil Code 1784.43), with a separate cancel form, the total price in ads and first messages, add-ons shown as optional, and two years of records. The DMV says UCL penalties reach $2,500 per violation.
What does the law say? Key facts and official sources
| Item | What the law says | Source |
|---|---|---|
| Law | SB 766, California Combating Auto Retail Scams (CARS) Act, Civil Code 1784.20 to 1784.44; operative October 1, 2026 (Civil Code 1784.28) | Official source |
| 3-day right to cancel | Required on used vehicles sold or leased at retail for $50,000 or less; not available if driven more than 400 miles after signing (Civil Code 1784.43(a)(1)) | Official source |
| Cancel form | Separate document titled "3-Day Right to Cancel Used Car Purchase or Lease", also in the negotiation language if covered by Civil Code 1632 (1784.43(b)) | Official source |
| Restocking fee | 1.5% of the sale price, at least $200 and at most $600, plus $1 per mile over 250 miles, up to $150 (Civil Code 1784.31(g)) | Official source |
| How the 3 days count | Civil Code 1784.31(i): three calendar days starting the day after signing, extended if the third day the dealership is closed. The DMV memo says "three business days" | Official source |
| Total price and add-ons | Total price in ads for a specific vehicle or financing and in the first written communication; add-ons disclosed as optional, verbally and in writing in at least 12-point type (DMV OLIN 2026-10) | Official source |
| Records | Keep ads, pricing communications, add-on disclosures and cancellation documents for two years (DMV OLIN 2026-10) | Official source |
| Penalties | No fixed fine in the Act; UCL civil penalties up to $2,500 per violation, plus DMV or BAR action and claims on the $50,000 dealer bond (DMV OLIN 2026-10) | Official source |
| Last verified | October 22, 2026 | Astor Ventures |
What must a used-car dealer do on every deal?
For each retail sale or lease of a used vehicle at $50,000 or less, give the buyer the separate "3-Day Right to Cancel Used Car Purchase or Lease" form, show any restocking fee within the legal limits, and keep a copy. Before that, make sure the total price appears in ads for a specific car or financing and in your first written message, and that every add-on is offered as optional.
How are the 3 days counted?
Civil Code 1784.31(i) says three calendar days starting the calendar day after the purchase or lease is signed, extended to the next open day if the third day falls on a day the dealership is closed, and ending at close of business. The DMV implementation memo describes it as three business days. The two wordings differ, so read the statute and check with the DMV or your counsel before you set your policy.
What does a mistake cost?
The DMV memo says the CARS Act has no fixed per-violation fine. Violations are enforced through existing laws: civil penalties of up to $2,500 per violation under the Unfair Competition Law, restitution and attorney fees, plus DMV or Bureau of Automotive Repair action such as license suspension, administrative fines and claims on the $50,000 dealer bond. Cancellation mistakes can also mean refunding down payments and trade-ins.
Want it done in an afternoon? The California SB 766 used-car dealer notice kit turns these rules into fill-in templates, a checklist and a tracker, with the official sources quoted. One-time payment, instant download.
What else do people ask?
Does the 3-day right apply to new cars?
No. Civil Code 1784.43 covers used vehicles sold or leased at retail for $50,000 or less.
Can a buyer waive the CARS Act rights?
No. Civil Code 1784.21 says any waiver by a consumer is contrary to public policy, unenforceable and void.
How long must I keep records?
Two years, according to the DMV memo OLIN 2026-10.
Is this legal advice?
No. General information only.
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