California has taken a significant step toward enhancing consumer protections for car buyers. Governor Gavin Newsom recently signed the California Combating Auto Retail Scams (CARS) Act into law. This new legislation promises to reshape the landscape of auto sales in the state.
Key Features of the CARS Act
The CARS Act introduces several critical measures aimed at improving the transparency and fairness of automobile sales practices:
- Advertising and Sales Practices: Dealers are now required to provide clear and accurate advertising. All vehicle price quotes must include the total cost, eliminating misleading representations.
- Prohibition of Non-Beneficial Add-Ons: The law prevents dealerships from charging for add-ons that do not offer tangible benefits to the customer.
- Optional Product Payment Changes: Buyers can now take up to 10 days to pay for optional products significantly easing the financial burden typically associated with vehicle purchases.
- Three-Day Return Policy: For used cars priced under $50,000, consumers can return vehicles within three days, provided they are undamaged and have fewer than 400 miles since purchase.
Compliance and Record-Keeping
Alongside consumer protections, the CARS Act enforces stringent compliance obligations for car dealerships:
- Dealers must retain all records regarding advertisements, contracts, and return documentation for a minimum of two years.
- This requirement is designed to empower regulators to monitor dealership misconduct and resolve related disputes effectively.
Impact and Implementation Timeline
The CARS Act is set to come into effect on October 1, 2026. This timeline allows dealerships the necessary time to make adjustments to their systems and sales strategies before the law is fully implemented.
Experts believe the CARS Act represents a remarkable achievement in California’s effort to ensure transparency in auto sales. It aims to fundamentally change how vehicles are sold, addressing long-standing concerns of consumer advocates.
As California navigates these reforms, the impact of the CARS Act will likely resonate throughout the automotive industry, enhancing buyer confidence and setting a precedent for consumer protection nationwide.
