What is a California dealer not allowed to do when a used-car buyer cancels?
Quick answer
Eight things. The dealer may not impede the cancellation, overcharge the restocking fee, hold back the down payment or trade-in, refund late, fail to pay for a sold trade-in, withhold the trade-in sale papers, claim damage beyond normal wear without a reasonable basis, or say the person who can return the money is not available (Civil Code 1784.43(c)). The refund is due within 48 hours.
What does the law say? Key facts and official sources
| Item | What the law says | Source |
|---|---|---|
| Law | Cal. Civil Code 1784.43(c), CARS Act (SB 766); operative October 1, 2026 | Official source |
| Banned 1 to 4 | Impeding the cancellation; overcharging the restocking fee; withholding the down payment or trade-in; failing to refund the down payment on time | Official source |
| Banned 5 to 8 | Failing to pay for a sold trade-in; failing to give the trade-in sale receipt or contract; claiming damage beyond reasonable wear and tear without reasonable basis; claiming the person who can return the money or trade-in is unavailable | Official source |
| Refund deadline | Cancel the contract and refund within 48 hours, minus allowed deductions; not responsible for bank or card processing delays (1784.43(d)(1)) | Official source |
| Checks | If paid by check or another non-immediate method, refund may wait until 2 business days after the payment is verified, with proof of when it was verified (1784.43(d)(2)) | Official source |
| Damage records | The dealer must keep documentation of any damage beyond reasonable wear and tear (1784.43(b)(6)(B)(ii)) | Official source |
| Last verified | October 23, 2026 | Astor Ventures |
What counts as impeding a cancellation?
The statute does not list examples beyond the other seven items. Practices that make it harder to return the car, such as refusing to accept it during business hours or demanding conditions the law does not allow, are the kind of thing the rule targets. Train your staff to accept returns that meet the statutory conditions without delay.
Can the dealer deduct for damage?
Only for damage beyond reasonable wear and tear that the buyer caused, and the dealer must document it. Defects or mechanical problems that show up after delivery and were not caused by the buyer do not count against the buyer. Claiming damage without a reasonable basis is itself a violation.
What if the sales manager is off that day?
That is not a reason to delay. Claiming the person authorized to return the down payment or trade-in is not available is one of the eight listed violations, and the 48-hour refund clock still runs.
Want it done in an afternoon? The California CARS Act dealer 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 48 hours count weekends?
The statute says no later than 48 hours and does not exclude weekends. Delays caused by a bank or card company are not held against the dealer.
What must the buyer bring back?
The vehicle lien-free and in the same condition except normal wear, any restocking fee not deducted from the refund, and any other cash or items received in the deal, delivered in person during business hours.
Is there a dollar fine?
1784.43 sets no dollar fine itself. See our CARS Act penalty guide for how the law is enforced.
Is this legal advice?
No. General information only.