California's New CARS Act Aims to Protect Car Buyers, But Costs Remain High

California is implementing new regulations to offer greater protection to car buyers, particularly concerning dealership practices. Effective October 1, the California CARS Act (Senate Bill 766) requires dealerships to be more upfront about vehicle pricing and provides a 48-hour window for certain buyers to return their purchased vehicles for a full refund.

Governor Gavin Newsom signed the bill into law, which State Senator Ben Allen introduced. Allen stated the law aims to end years of car shoppers being "mistreated and duped into purchasing unsafe vehicles or vehicles with add-ons and features they didn’t know about, saddling them with unnecessary debt and risking their lives on the road."

Under the new legislation, dealerships must clearly display vehicle prices in advertisements, excluding taxes and specific fees. For vehicles priced at $50,000 or less, buyers can return them within 48 hours for a full refund, provided the vehicle has not accumulated more than 400 additional miles and a restocking fee is paid. The law also prohibits dealers from misleading consumers about financing terms, vehicle availability, or the necessity of add-ons like warranties and tire protection plans.

Despite these new protections at the dealership level, the law does little to alleviate the ongoing high costs associated with car ownership in California. The state continues to grapple with some of the highest gasoline prices in the nation, with regular unleaded averaging close to record highs. Furthermore, a separate law approved in August will phase out replacement tires that do not meet California's new energy-efficiency standards. This regulation is anticipated to affect approximately 70% of the current replacement tire market, potentially increasing costs for compliant tires. Governor Newsom has defended these tire regulations, arguing that lower-resistance tires improve mileage, ultimately saving drivers money on fuel or electricity.