What is the penalty for violating California's CARS Act (SB 766)?
Quick answer
The CARS Act sets no fixed per-violation fine. The California DMV says 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 action against the dealer license, administrative fines and claims on the $50,000 dealer bond. The Act applies from October 1, 2026.
What does the law say? Key facts and official sources
| Item | What the law says | Source |
|---|---|---|
| Law | SB 766, the California Combating Auto Retail Scams (CARS) Act, adding Civil Code 1784.x sections | Official source |
| In force | October 1, 2026, for licensed dealers selling or leasing light-duty vehicles under 10,000 lbs (DMV OLIN 2026-10) | Official source |
| Fixed fine in the Act | None. The DMV says the Act does not specify fixed per-violation fine schedules | Official source |
| Civil penalty | Up to $2,500 per violation under the Unfair Competition Law; FAL and CLRA claims also possible | Official source |
| License and bond | DMV or BAR action: license suspension or revocation, administrative fines, claims on the $50,000 dealer bond | Official source |
| Deal-level remedies | Refund of down payments and trade-ins, reversal of financing contracts, restitution for prohibited add-ons | Official source |
| Last verified | October 19, 2026 | Astor Ventures |
Is there a set fine for each CARS Act violation?
No. The DMV implementation memo (OLIN 2026-10) says the CARS Act does not specify fixed per-violation fine schedules. Instead, violations are enforced through existing California laws and agencies, so the cost depends on which law is used and how many violations a court or agency finds.
Who can enforce the CARS Act against a dealer?
The DMV memo lists the Unfair Competition Law, the False Advertising Law and the Consumers Legal Remedies Act, which allow civil penalties, restitution, injunctions, attorney fees and possible class actions. On the licensing side, the DMV and the Bureau of Automotive Repair can act against the dealer.
Which mistakes cost dealers the most?
Cancellation and add-on mistakes hit the deal itself: the DMV says dealers can be required to refund down payments and trade-in values, reverse financing contracts and pay restitution for prohibited or non-beneficial add-ons. Failing to keep the required two years of records can lead to DMV or BAR enforcement.
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What else do people ask?
Is the $2,500 counted per car or per ad?
The DMV memo says up to $2,500 per violation under the UCL but does not say how violations are counted. Treat each ad, quote and contract as a separate risk.
When did CARS Act enforcement start?
October 1, 2026. The old optional 2-day contract cancellation option was replaced by the automatic 3-day right on used vehicles priced at $50,000 or less.
Does the $50,000 dealer bond change?
No. The DMV memo says the $50,000 dealer bond requirement remains unchanged; claims on it are one of the possible consequences.
Is this legal advice?
No. General information only.
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