California CARS Act Compliance for Auto Dealers in Los Angeles County, CA

Prepare Your Dealership for California’s New CARS Act Requirements

2026-2027

California auto dealerships will face significant changes to vehicle sales and advertising practices when the California Combating Auto Retail Scams (CARS) Act (SB 766) takes effect on October 1, 2026. The new law introduces additional requirements related to vehicle pricing, customer disclosures, optional products, advertising practices, and dealership record retention.

For dealerships throughout Los Angeles County, preparing early can help reduce compliance risks and create clearer processes for sales, finance, internet departments, and management teams. The Law Office of Michael Geller helps automotive dealerships understand changing regulations and develop compliance practices designed around California’s evolving automotive sales requirements.

Call 951-618-4625 for a free consultation.

How SB 766 Changes California Auto Dealer Compliance

SB 766 represents one of the most significant changes to California vehicle sales practices in years. The law applies primarily to licensed dealers selling light-duty vehicles and focuses on improving transparency during the vehicle purchase and lease process.

Key areas affected by the California CARS Act include:

Vehicle Advertising and Total Price Requirements

Dealers advertising a specific vehicle for sale must provide the vehicle’s total price when certain advertisements or communications reference a specific vehicle or pricing information.

The advertised total price generally must include items such as dealer price adjustments and installed items added to the vehicle, while excluding certain government-required charges and permitted fees. Dealers must also ensure advertised vehicles are available and remove sold vehicle listings within required timeframes.

For Los Angeles County dealerships, this means reviewing online listings, digital advertising, vehicle pages, and marketing processes before the October 2026 effective date.

Used Vehicle Three-Day Right to Cancel

SB 766 creates a new three-day right to cancel for certain used vehicles sold or leased for $50,000 or less. Dealers will need to provide a required disclosure explaining the customer’s cancellation rights and applicable restrictions.

The law includes requirements related to:

• The cancellation timeframe
• Mileage limitations
• Restocking fees
• Return conditions
• Trade-in vehicle valuation procedures

Dealerships should review their sales procedures and forms to prepare for these new requirements.

New Disclosure and Add-On Product Requirements

The California CARS Act expands disclosure requirements related to optional products and services. These requirements apply beyond financed transactions and include cash sales and leases.

Dealerships will need to ensure optional products provide a benefit to customers and that required disclosures are properly included during the transaction process.

This includes reviewing processes involving:

• Vehicle protection products
• Service contracts
• GAP agreements
• Optional vehicle products
• Customer worksheets

Helping Los Angeles County Dealerships Prepare for Compliance

Preparing for SB 766 requires more than updating paperwork. Dealerships should review how information moves through their entire sales process, from online advertising to customer communication and final documentation.

The Law Office of Michael Geller helps dealerships evaluate compliance concerns involving:

• Sales procedures
• Customer communications
• Advertising practices
• Documentation requirements
• Dealership policies
• Regulatory changes affecting automotive sales

A proactive compliance approach can help dealerships identify areas that may need attention before the new requirements become effective.

Dealership Record Retention and Compliance Documentation

SB 766 creates new record retention requirements for certain dealership records. Dealers will need to maintain documentation related to advertising compliance, vehicle transactions, optional products, cancellation requests, refunds, and customer communications.

Maintaining organized records can help dealerships respond to questions and demonstrate compliance with applicable requirements.

Compliance Solutions for California Auto Dealers

Many dealerships are reviewing technology solutions and internal processes to help manage the increased compliance requirements created by SB 766.

Compliance platforms can assist with areas such as:

• Website monitoring
• Advertising reviews
• Disclosure management
• Record retention
• Compliance alerts
• Employee training

However, technology is only one part of a dealership’s compliance strategy. Understanding the legal requirements and implementing proper policies are important steps for California dealers preparing for October 1, 2026.

Contact the Law Office of Michael Geller About California Dealer Compliance

The California CARS Act will change how dealerships advertise vehicles, communicate with customers, document transactions, and manage compliance records.

For auto dealerships in Los Angeles County and throughout California, preparing before the October 1, 2026 effective date can help create smoother processes and reduce compliance concerns.

Contact The Law Office of Michael Geller to understand automotive regulations and develop strategies for navigating California’s changing legal requirements.

Frequently Asked Questions

What is the California CARS Act?

The California CARS Act, also known as SB 766, is a California law that creates new requirements for vehicle advertising, customer disclosures, optional products, and dealership record retention. The law takes effect October 1, 2026.

When does the California CARS Act take effect?

SB 766 becomes effective on October 1, 2026. California dealerships should review their sales processes, advertising practices, and documentation procedures before the effective date.

Does the California CARS Act apply to all vehicle sales?

SB 766 primarily applies to licensed dealers selling light-duty vehicles. Certain transactions, including some wholesale, fleet, and exempt vehicle transactions, are not covered under the law.

What changes does SB 766 create for California dealerships?

SB 766 creates new requirements related to total price advertising, used vehicle cancellation rights, customer disclosures, optional products, material misrepresentations, and record retention.

How can dealerships prepare for the California CARS Act?

Dealerships can prepare by reviewing advertising practices, updating sales procedures, training employees, reviewing required disclosures, and implementing processes to maintain required records.