CALIFORNIA – The California Legislature has passed SB 766 – the California Combating Auto Retail Scams (CARS) Act, aimed at strengthening consumer protections in new and used vehicle purchases.
The bill now heads to Governor Gavin Newsom, who will decide whether to sign or veto it.
The Federal Trade Commission (FTC) issued the CARS Rule in late 2023 with a planned effective date of July 30, 2024. The rule aimed to crack down on bait-and-switch tactics and hidden fees in the car-buying process.
However, after a legal challenge, a federal appeals court vacated the FTC’s CARS Rule, halting implementation.
SB 766 incorporates several provisions from the FTC’s CARS Rule to make car buying more transparent and fair.
Bans dealers from misrepresenting prices
The bill bans dealers from misrepresenting key details on sales, leases, financing, prices, terms, or add-ons.
It also requires clear disclosure of the total price in advertisements and communications.
Other key measures include:
- Banning add-on products or services that provide no benefit to the buyer or lessee.
- Creating a 3-day return window for certain used vehicles, with limited fees.
- Requiring dealers to keep sales records and communications for two years.
Concerns about compliance burdens
Some auto dealer associations and businesses in the auto sector raised concerns about compliance burdens and practical implementation.
Several amendments were made during the legislative process to address these concerns.
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