California Combating Auto Retail Scams (CARS) Act
Landmark first-in-the-nation law takes effect October 1
FAQs and Tips for California car buyers from
Consumers for Auto Reliability and Safety (CARS), non-profit consumer organization that led the coalition in support of the CARS Act
Disclaimer: The information provided here is not intended as legal advice, and is not a substitute for getting legal counsel to advise you based upon all relevant facts, and all applicable regulations and laws.

At a time when the prices for new and used vehicles have reached record-breaking highs, due to President Trump's hiking tariffs on auto components, common car dealer scams, and other factors, the California Combating Auto Retail Scams (CARS) Act (SB 766) will make buying new and used cars in California more affordable and less risky – without costing taxpayers.

Leading economists project that the CARS Act's truth-in-pricing mandate and new protections against worthless add-ons will save California car buyers an estimated $234 million annually in reduced search costs, plus another 8.5 million hours in time savings each year.

In addition to those savings, the California CARS Act also creates a new, history-making first-in-the-nation 3-day cooling off period for used cars that cost $50,000 or less, freeing used car buyers to return vehicles for any reason for a full refund, minus a restocking fee between $200 – $600.

This new right will empower used car buyers in negotiating with car dealers, and help consumers, including rideshare drivers and many small businesses, avoid getting stuck with unfair deals or unsafe, defective cars. It will also help give dealers who don't scam their customers a competitive advantage.

The Act is aimed at protecting California new and used car buyers from the #1 source of consumer complaints nationwide: auto sales and service. According to the Consumer Federation of America annual consumer complaint survey, auto sales, manufacturing issues, and service complaints have topped the charts of the top ten consumer complaints to state and local consumer protection agencies for the past ten years.

Key provisions in the CARS Act:
  • Requires car dealers to disclose the "total price" up front and in advertising, including any add-on items installed by the manufacturer, making the actual "off the lot" prices more honest and transparent, and encouraging competition over prices
  • Prohibits car dealers from requiring the purchase of add-on items that were not installed by the manufacturer, in order to buy the new or used car
  • Requires dealers to disclose at the time of sale or lease that add-on items not installed by the manufacturer are optional
  • Bans car dealers from charging extra for add-ons that "would not benefit" car buyers, including lifetime oil changes or catalytic converter markings for electric vehicles, and service contracts that are void due to pre-existing conditions, such as prior damage from a crash or flood or preexisting mechanical conditions
  • Prohibits dealers from advertising or claiming they are affiliated with or endorsed by the U.S. military or any government agency
  • Creates a new first-in-the-nation right to return a used vehicle that cost $50,000 or less within 3 calendar days for any reason for a full refund, minus a restocking fee between $200 – $600 (and sometimes other fees)
HOW TO USE CALIFORNIA'S NEW 3-DAY COOLING OFF PERIOD
FOR USED CAR BUYERS

Exciting news for California used car buyers! Starting October 1, you will have an important new right that is the first in the nation, to return a used car for any reason and get a refund, minus a restocking fee. You don't have to explain why you are returning the car, or prove anything, to use your new right.

This means you will have 3 days without being under the pressure car buyers often face at car dealerships, freeing you to drive the car, check out the contract and other paperwork, compare interest rates and prices, scope out the car online, and possibly also get the car inspected by an expert auto technician. Then if you choose, you can return the car for a refund, without a lot of hassles.

But the law is complicated and there's more you need to know, to make the most of California's new car buyer protection law.

TIP: Be sure to check out #19, 20 and #33 below, about steps to take BEFORE you shop for a car, to help avoid killer cars.

Frequently Asked Questions (FAQ's):
Quick Directory of Questions, Alerts & Topics
Click any item below to jump directly to that question or alert on this page:
  1. Who qualifies to use the new 3-day cooling off period for used cars?
  2. What vehicles are NOT covered by the 3-day cooling off period?
  3. When do I have to return the used car?
  4. Can someone else return the car for me?
  5. Is there a limit on how many miles I can drive before returning the car?
  6. Can the dealership charge for some of the miles that I drive the car?
  7. Can the dealer charge a "restocking fee" if I return the car?
  8. How much are dealers allowed to charge for the restocking fee?
  9. Restocking Fee Chart
  10. What other charges should I be prepared to pay if I return the car, if they apply?
  11. If I return the car, what should I expect to get from the dealer?
  12. Can the dealer require me to pay the restocking fee before I get a refund?
  13. How soon should I expect to get a refund?
  14. What else do I need to do, to use the cooling off period?
  15. What if the car needs to be towed back to the dealership?
  16. I traded in a vehicle when I bought the used car. Does the dealer have to give me back my traded-in vehicle and all keys that I gave the dealer?
  17. ALERT Don't get trapped in a bad deal by "negative equity" owed for a trade-in vehicle
  18. Why is it important to see the actual title to the car, before buying a used car?
  19. What other steps should I take BEFORE I shop for a car?
  20. WARNING BEWARE OF USED CARS WITH UNREPAIRED SAFETY RECALL DEFECTS
  21. Why is it so important to check for safety recalls?
  22. How common is it for car dealers to sell vehicles with unrepaired safety recall defects?
  23. Can you trust car dealers to tell you how unsafe a recalled car is?
  24. How can you check whether a car has unrepaired safety recall defects?
  25. Are there more reasons to avoid getting stuck with an unrepaired recalled car?
  26. What if the safety recall notice makes it sound like the defect is not really dangerous?
  27. The dealer advertised that the car passed an inspection. Do I still need to check for safety recalls?
  28. CarMax advertises that all their cars must pass a 125-point inspection to qualify to be sold as "CarMax Certified" cars. Does that mean they are free from deadly safety recall defects?
  29. What are the laws against selling unrepaired recalled cars?
  30. California state laws that may apply, regarding unrepaired recalled cars
  31. The dealer says it's easy to get the recall repaired. Is that true?
  32. Are auto safety recall repairs free?
  33. WARNING BEWARE of HAZARDOUS REBUILT WRECKS AND FLOOD CARS
  34. What else should I check, before I decide whether to keep a car or return it during the cooling off period?
  35. ALERT BEWARE!! CALIFORNIA USED CAR BUYERS HAVE LOST PROTECTIONS AGAINST USED CAR LEMONS
  36. Were you scammed by an unscrupulous car dealer? (Where to complain)
  37. Want to know more about the CARS Act? (Exact wording of SB 766)
  38. Californians Submitted Comments in Favor of the FTC's CARS Rule
1. Who qualifies to use the new 3-day cooling off period for used cars?

All used car buyers or lessors IF the car, truck or SUV you buy or lease:

  • Is used, meaning it was previously sold or registered to someone else or is described in the sales or leasing contract as "used"
  • Was purchased or leased from a licensed car dealership in California after October 1, 2026 – including if you live out of state, but buy or lease the car from a dealer in California
  • Has a total sales price of $50,000 or less
  • Weighs less than 10,000 pounds Gross Vehicle Weight Rating (GVWR)
  • Was purchased primarily for personal use, or primarily for business use by an individual or business that bought fewer than 5 vehicles that year from the same auto dealership
  • Is returned in the same condition as when you bought it, except for "reasonable wear and tear" and defects or mechanical problems in the car when you bought it, and that you did not cause (for example, if the "check engine" light comes on because there was a problem with the emissions system that showed up when you drove the car enough for the error codes to transmit information about the problem)
  • Was driven 400 miles or less before you returned it to the dealership
2. What vehicles are NOT covered by the 3-day cooling off period?
  • New vehicles, including cars, trucks, and SUVs
  • Off-road vehicles
  • Motorcycles
  • Private sales between individual vehicle owners
  • Used cars sold at an auction
  • Vehicles that weigh more than 10,000 pounds Gross Vehicle Weight Rating
  • Vehicles purchased by a person, including a small business owner, who buys or leases 5 or more vehicles that year, from the same auto dealer
  • Vehicles purchased from a car dealership located out-of-state
  • Vehicles purchased or leased before October 1, 2026
3. When do I have to return the used car?
  • You have up to 3 calendar days, starting the day after you bought the car, until the close of business on the 3rd day.
  • Exception: If the dealership is closed on the 3rd calendar day, you have until the close of business on the day the dealer re-opens to the public to return the car.

TIP: The dealer is required to give you a written disclosure when you buy or lease a used car that tells you when you have to return it, to use the 3-day cooling off period. Be sure to read that disclosure carefully and plan ahead so you can return the car on time.

The CARS Act requires dealers to provide that written disclosure in English, Spanish, Chinese, Vietnamese, or Tagalog if the deal was negotiated in one of those languages.

4. Can someone else return the car for me?
  • No. If you bought or leased the car, then you have to return the car "personally," yourself.

CARS recommends: Make a plan in advance. You may need to arrange for time off from work during the hours the dealership is open, and for transportation after you return the car. If you're not sure whether you can return the vehicle during the 3-day period, don't count on being able to use the cooling-off period, when you buy or lease the car.

5. Is there a limit on how many miles I can drive before returning the car?
  • Yes. The limit is 400 miles.

Exception: Some dealers may offer return policies with more miles. To be sure how far you can drive the car, read the written disclosure that dealers are required to provide you when you buy the car.

6. Can the dealership charge for some of the miles that I drive the car?
  • Dealers are NOT allowed to charge you for the first 250 miles.
  • If you drive between 250 miles and 400 miles, the dealer can charge $1 per mile for every mile over 250 miles, up to a maximum of $150, deductible from your refund. Dealers are allowed to charge the mileage fee, if any, in addition to charging a restocking fee.
7. Can the dealer charge a "restocking fee" if I return the car?

Yes, car dealers are allowed to charge a restocking fee, but the CARS Act limits how much they can charge.

8. How much are dealers allowed to charge for the restocking fee?
  • No more than 1.5% of the purchase price of the car
  • A minimum of $200
  • No more than $600
9. Restocking Fee Chart
Maximum amount dealer can charge for restocking fee, depending on the sale price of the used car you bought:
Vehicle Price Restocking Fee Cap
$5,000 $200
$10,000 $200
$20,000 $300
$30,000 $450
$40,000 $600
$50,000 $600
* Dealers are prohibited from charging you more for the restocking fee.
* Dealers can charge you less, or nothing, if they choose.

Exception: Online dealers like Carvana may charge a "shipping fee" instead of the restocking fee. The amount of the shipping fee must be the actual cost for shipping. If the dealer charged you more for shipping than the allowable restocking fee, and if you choose to return the vehicle, the dealer must refund you the difference between what it charged you for the shipping fee and the allowable restocking fee.

10. What other charges should I be prepared to pay if I return the car, if they apply?
  • Towing the vehicle back to the dealership if the car breaks down or is unsafe to drive. You may be able to recover the cost of towing from the dealership, depending on many factors.
  • The amount of any negative equity, if the dealer gave you less for your traded-in vehicle than the amount you owed the lender.
  • The difference between the restocking fee and the amount of the refund, if the refund is less than the restocking fee.
11. If I return the car, what should I expect to get from the dealer?

The dealer must give you a written receipt when you return the car, showing the date and time, and a list of any deductions from your refund.

Note: The CARS Act prohibits the dealer from doing "Anything to impede a buyer or lessee from exercising the right to cancel the purchase or lease of a vehicle" that is eligible to be returned.

12. Can the dealer require me to pay the restocking fee before I get a refund?
  • Usually no. Dealers are not allowed to charge you a restocking fee up front, before you get a refund. If they charge a restocking fee, they have to deduct it from the amount of your refund, to make it more affordable for people who don't have cash on hand.
  • Exception: If the restocking fee is more than the refund, the dealer may require you to pay the difference up front in order to return the vehicle.
13. How soon should I expect to get a refund?
  • No later than 48 hours after you return the car. Car dealers are required to provide a refund for the full purchase price, minus any deductions for the restocking fee and / or mileage, or outstanding amounts owed for the traded-in vehicle, within 48 hours.
  • Exception: If you paid with a check or other form of payment that cannot be immediately verified, the dealer may delay providing a refund until two business days after the payment is verified. The dealer must provide you with documentation, such as a notice from their bank, showing when the payment was verified.
  • Some dealers choose to offer return policies with longer time periods or more mileage. The CARS Act allows dealers to offer policies that "provide greater consumer protections" than the Act requires. But they still have to comply with the rest of the new law, including regarding how soon they must refund your money, and other provisions.

CAUTION: The law does not specify how car dealers must provide the refund, or whether it can be picked up at the dealership or mailed to you.

The law does prohibit dealers from "withhold[ing] the buyer's or lessee's downpayment or trade-in vehicle after the right to cancel has been exercised."

CARS recommends that you arrange to pick up the refund, if possible, particularly if you need that money to buy another car right away. Keep in mind that there may be a delay before a refund check clears and is credited to your account. Check with your credit union or other banking institution for details.

14. What else do I need to do, to use the cooling off period?

Make sure the car is in the same condition as when you bought it, except for "reasonable wear and tear" and "any defect or mechanical problem" that existed in the car when you bought it.

CARS recommends: Take photos of the car when you buy it, including the exterior and interior, and the odometer reading, so you can show what condition it was in at that time, and how many miles are on the odometer, in case you decide to return it.

If you decide to return the vehicle, take more photos that show the date and time when you arrived at the dealership to return the car, the condition of the interior and exterior, and what the odometer reading was at that time. Then you will have proof that you drove the car less than 400 miles.

Note: The CARS Act prohibits dealers from "claiming damage to the vehicle in excess of reasonable wear and tear without reasonable basis," or claiming "the person authorized to return the buyer's or lessee's downpayment or trade-in vehicle is not available."

15. What if the car needs to be towed back to the dealership?

The CARS Act prohibits dealers from refusing to provide a refund for vehicles that have major problems and need to be towed back to the dealership if the reason the car had to be towed is due to "any defect or mechanical problem that manifests or becomes evident," and that you did not cause.

Tip: Millions of vehicle owners belong to the American Automobile Association (AAA), a non-profit which provides various free or discounted towing services for members and also provides other services that are not free, such as battery replacements. Some AAA clubs also offer basic DMV services, including vehicle registrations, license plates, and title transfers.

16. I traded in a vehicle when I bought the used car. Does the dealer have to give me back my traded-in vehicle and all keys that I gave the dealer?

In general, the dealer must return your traded-in vehicle and the keys – but there's a major exception, so you may not get your trade-in back.

Exception: If the dealer sold your traded-in vehicle or "initiated the process to transfer the title" of the trade-in.

If the dealer does not give you back your traded-in vehicle, the dealer has to pay you one of these three amounts, whichever is the MOST:

  1. The agreed-upon value of the trade-in vehicle in the sales or lease agreement
  2. The amount the dealer charged the next owner for your traded-in vehicle, and the dealer must give you written proof of the sale amount
  3. The fair market value of the trade-in vehicle, as determined by a nationally recognized pricing guide chosen by the dealer, such as Kelly Blue Book.

CARS recommends: If you need to get your traded-in vehicle back, insist when you buy or lease a car that the dealer agree in writing that you will get back your trade-in (and keys) in the same condition and without any delay, if you use your right to return the car. If the dealer refuses to guarantee in writing that you will get your trade-in back, in the same condition as when you left it at the dealership, you are free to take your business somewhere else.

Tip: According to lobbyists for the California New Car Dealers Association, most franchised car dealers and other dealerships with a showroom and car lot do not sell traded-in vehicles right away and can easily store trade-ins on their lots for at least several days. However, online auto retailers such as Carvana argued against being required to return trade-ins, because they said they need to move those cars immediately.

Tip: Before trading in your vehicle, take a close look at the price the dealer is offering for your vehicle. Compare the dealer's offer with the Kelly Blue Book or Edmunds price to help find out if the dealer is making a fair offer.

Tip: If the dealer claims it has sold your traded-in vehicle, and you want it back, check the dealer's website to see if your trade-in vehicle is listed for sale, and the asking price. If it is listed, then you will know that the dealer has probably not sold your trade-in vehicle yet. If you borrowed from a lender to pay for your trade-in vehicle, and still owed more payments when you traded it to the dealer, check with the lender to find out whether the dealer has paid off the loan. That also means the dealer probably still has your trade-in, and should return it to you.

17. CONSUMER ALERT!!!
Don't get trapped in a bad deal by "negative equity" owed for a trade-in vehicle

If you trade in a vehicle before you pay off the full amount of the loan, and the dealer gives you less for your traded-in vehicle than the amount you still owe, you may not be able to use the cooling off period.

The difference between what you owe and how much the dealer credits you for your trade-in vehicle is called "negative equity" or being "upside down" in a car loan. For example, if you still owe $6,000 and the dealer pays you only $4,000 for your trade-in, you have $2,000 in negative equity. That amount is then rolled over into your new loan, adding even more debt. For example, if you buy another car for $10,000, the loan will be for $12,000, plus interest and other costs.

Under the CARS Act, dealers can require you to pay them the amount you still owed your lender, minus the amount they agreed to pay you for your trade-in, before giving you a refund for a newly purchased used car. So unless you have that amount ready to pay in cash, you may not be able to use the cooling off period to get a refund.

CARS recommends that if you can wait to buy another car, it's wise to keep your current car and continue to make payments until the loan is all paid off and you have clear title to the car.

Another option: Shop around for a dealer who agrees in writing to keep your traded-in vehicle (with keys) for at least 3 days, and return it to you in the same condition – without driving it or making any repairs or other changes – if you return the car you just bought, during the 3-day cooling-off period.

18. Why is it important to see the actual title to the car, before buying a used car?

Many dealers sell used cars they don't actually own. Car dealers often buy used cars from people who still owe their lender for the remainder of their car loan, known as being "upside down" or having "negative equity." If the entire loan has not been paid, the former owner's lender still has a lien on that car. That means that lender may repossess the car from you – even if you paid cash to buy it, or make all the payments to your lender in full and on time.

This is a serious risk. Some victims of unpaid liens have lost their jobs when their vehicles were repossessed, without warning, by the former owner's lender. Some dealers have sold vehicles with unpaid liens to hundreds of used car buyers, then went out of business, leaving their victims in the lurch with huge loans to pay and no car. This problem is worst during economic downturns, but even in good economic times it's a persistent problem.

You may also have difficulty registering the car if there is an unpaid lien held by the former owner's lender. If you cannot get the car properly registered, you are subject to being pulled over by the police and ticketed, fined, and having your newly purchased car towed away and impounded. Not only is it expensive to pay impound fees, but you may not be able to get your car out of the impound lot at all, if you are not the registered owner.

19. What other steps should I take BEFORE I shop for a car?
Before you shop for a car:
  • Research car models for safety, reliability and other features based on data provided by Consumer Reports, available by prescription and also often available for free at libraries.
  • LIFESAVING TIP: Get the Vehicle Identification Number (VIN) for any car you are thinking about buying, and check for unrepaired safety recalls that could kill you and other people. If it has an unrepaired safety recall, refuse to buy it. See #20 for more details.
  • Super important, for used car buyers: Arrange an appointment with a trustworthy expert auto technician / body shop to inspect the used car you buy, in time for you to return the car during the 3-day period, with less than 400 miles added to the odometer.

    A typical car inspection costs approximately $150 - $200 and should include downloading the diagnostic error codes, evaluating the condition of the car and tires, putting the car up on a lift and looking for signs of prior damage from a crash or flood, checking the battery life on an electric vehicle or hybrid, checking for counterfeit or missing airbags, and checking for unrepaired safety recalls.

    Today's cars are highly computerized and it takes special scan tools and diagnostics to identify hidden problems that are hazardous or extremely expensive to repair, so it pays to have a professional check out the car. If you can arrange to have the inspection done before you buy, that's even better.

    NEVER rely on the dealer's so-called "whatever-point" "inspection" to ensure a car is safe or reliable. Unscrupulous car dealers routinely deceive car buyers about their "inspections," giving the false impression you don't need to get your own inspection. But millions of vehicles with potentially deadly safety defects have passed car dealers' bogus, deceptive "inspections."

    Warning: Some vehicle owners have been killed by deadly replacement airbags in vehicles that had airbags which deployed in a crash or were stolen.

    A popular place to find reviews of auto mechanics and body shops: Car Talk's Mechanic's Files.
  • Join a reputable credit union that offers competitive rates for car loans. Credit unions are non-profits, and most credit unions offer better rates than other lenders. If you have credit problems, and don't need to buy a car right away, take advantage of credit counseling services that can help you improve your credit before you buy. Many credit unions offer free financial counseling to their members. Improving your credit score before you buy can save you hundreds or thousands of dollars.
  • Save up and pay in cash or get pre-approved for a loan, so you know how much you can afford to spend and what interest rate you qualify to get.
  • Join the American Automobile Association, a non-profit that offers various towing services and other services for vehicle owners.
  • If you may want to trade in your current car, check a car pricing guide such as Kelly Blue Book or Edmunds to find out how much it is worth, taking the mileage, condition, and where you live into account. Car pricing guides are also available at local libraries.
  • A popular place to find reviews of auto mechanics: Car Talk's Mechanic's Files.
20. WARNING!!! BEWARE OF USED CARS WITH UNREPAIRED SAFETY RECALL DEFECTS
21. Why is it so important to check for safety recalls?

Safety recall defects can kill you, your family, and other innocent people.

  • According to the National Highway Traffic Safety Administration, the nation's top auto safety agency, "ALL safety recalls are serious."
  • If the vehicle has an unrepaired safety recall defect (or multiple recall defects), it is unsafe. Do NOT buy the car. Insist on a car that is safe and free from killer safety recall defects.

You could be killed before you even get a chance to get the recall defect repaired. In one tragic incident in San Diego, a CHP officer and his wife, their 13-year-old daughter, and his brother-in-law were all killed within hours on the same day a local car dealership handed him the keys to a Lexus with a defect that caused it to speed out of control. They were on their way to a soccer match when the defect happened and tragedy struck, killing all four family members at once (NBC San Diego news report).

That horrific crash led to a massive safety recall involving millions of vehicles that eventually were found to have defects including faulty transmissions or sticking accelerator pedals.

CARS recommends: Check for unrepaired safety recall defects BEFORE you buy or lease a vehicle, and refuse to buy vehicles with unrepaired safety recalls.

Exception: A very small percentage of vehicles that are recalled due to safety issues are recalled because there is a warning sticker that is missing, or the information in the owner's manual about safety issues is wrong, or there are similar problems that do not mean the car itself is defective. If the car is being recalled because of issues that do not affect the safety of the car, then it may be sensible to buy the car, but to also insist on getting the warning sticker or corrections, and placing the stickers or corrections where they belong, usually on the dashboard or sun visor, or in the owner's manual.

Warning stickers are important for alerting parents and other caregivers how to avoid endangering babies and infants from being killed by an inflating airbag, in the event of a crash. A couple examples of warning sticker recalls: Ford missing warning stickers recall and Jeep missing airbag labels recall.

Accurate information in owner's manuals is important for informing vehicle owners about safety systems and components. A couple examples of recalls due to incorrect or missing information in owner's manuals: Ford missing owner's manual info and Audi wrong tire pressure information in manual.

TIP: Check online for reports about recalls involving the make, model, and year of the car, and download any warning stickers or corrections to the owner's manual and affix them where they belong.

22. How common is it for car dealers to sell vehicles with unrepaired safety recall defects?

It's shocking, but car dealers routinely sell millions of used cars that were recalled by the auto manufacturer because they have life-threatening safety defects such as:

  • catching on fire, even when parked
  • bad brakes
  • loss of steering
  • wheels that fall off
  • ticking time bomb airbags that cause blindness or bleeding to death
  • sticking accelerator pedals
  • stalling in traffic
  • seat belts that fail to work in a crash
  • backup cameras that malfunction
  • other obviously life-threatening safety defects.

An NBC Bay Area investigation checks nearly 1,000 cars and finds hundreds of recalled cars for sale on car dealership lots.

Car dealers even sell vehicles with defects that are so dangerous the manufacturer has issued a "DO NOT DRIVE" warning, or a warning that says "DO NOT PARK" the car near a home, office, or other building because it may burst into flames.

23. Can you trust car dealers to tell you how unsafe a recalled car is?

No. Unfortunately, you cannot trust the dealer to tell you the truth about how unsafe the car is. Many dealers downplay the risks, to make a quick sale.

When car buyers or their passengers or others who share the roads are injured or killed by an unrepaired safety recall, and they or their surviving family attempt to fight back in court, the dealers try to shift the blame onto them. Dealers also impose rigged, forced arbitration to keep victims from being able to hold them accountable in a court of law.

24. How can you check whether a car has unrepaired safety recall defects?

Get the Vehicle Identification Number (VIN) and check whether the car was recalled by the manufacturer due to a safety defect. It may even have multiple safety defects. The best time to do this is BEFORE you agree to buy the car.

The VIN is 17 digits and is a unique identifier for that specific vehicle, like its fingerprint. The VIN can be found on the driver's side of the dashboard, on a sticker on the driver's door jamb, and on the vehicle title.

Here's how to check: Simply enter the VIN at the website for the National Highway Traffic Safety Administration, here: https://www.nhtsa.gov/recalls.

Checking for safety recalls is free and takes only a few minutes and access to the internet.

If you don't have access to the internet, you can also call the manufacturer's toll-free number to ask whether a car with that VIN has an "open" (unrepaired) safety recall defect.

25. Are there more reasons to avoid getting stuck with an unrepaired recalled car?

Yes. Some more reasons include:

  • Long delays before repairs are available. Tens of millions of vehicle owners have experienced long delays in obtaining recall repairs, sometimes for months or even more than a year, due to shortages of repair parts, shortages of mechanics to perform recall repairs, and delays caused by manufacturers who failed for a long time to diagnose problems and design fixes.
  • Problems with accessing repairs. Most used car buyers are likely to face other barriers to obtaining recall repairs, such as difficulty getting time off from work during the hours when repairs are available, living long distances from the nearest authorized repair facility (which may be hundreds of miles away), not being able to leave your car at the authorized dealership when repairs take several hours or more than a day, and other logistical problems.
  • You could be held legally liable. If you don't get the repairs done in time and someone is injured or killed as a result, or if the car catches on fire and destroys homes or other property, you could be held at least partially liable and may even face criminal prosecution for being negligent.

    In one tragic case, a young woman in Texas pleaded guilty to negligent homicide when her fiance was killed in a crash caused by a safety defect that General Motors concealed from the public for over a decade. Eventually her conviction was overturned, but it's not worth the risk.
  • Potential lack of insurance coverage. Some insurers deny coverage for vehicles with unrepaired safety recall defects. You may believe you are covered, then discover that you are not, after a crash.
  • Limited options for loans. Some lenders refuse to issue loans for vehicles with unrepaired safety recall defects.
26. What if the safety recall notice makes it sound like the defect is not really dangerous?

The auto manufacturer's safety recall notice may give the false impression the defect is minor, but it could still kill you. Auto manufacturers often describe defects using language that is very technical and confusing, or fails to accurately reflect the real risks.

For example, many recall notices warn about a "thermal event." This may not sound dangerous. But it means the car may catch on fire and burn you, your family, or other passengers to death. If you park the vehicle in your garage, it may also burn down your home. It could also cause a wildfire. If you do not get it fixed in time, you could be held legally liable for the damage and harm to others.

27. The dealer advertised that the car passed an inspection. Do I still need to check for safety recalls?

YES. Even dealers who advertise that their cars passed an inspection and qualify to be sold as "certified" cars often fail to get safety recall defects fixed first – no matter how dangerous they are.

28. CarMax advertises that all their cars must pass a 125-point inspection to qualify to be sold as "CarMax Certified" cars. Does that mean they are free from deadly safety recall defects?

NO. Don't be fooled. Auto retailing giant CarMax has been exposed over and over again selling recalled used cars that are potential deathtraps. They admit publicly that they sell vehicles with unrepaired safety recalls. Instead of getting the repairs to fix deadly safety recall defects, CarMax merely provides a "disclosure" in an attempt to shift the legal liability onto their customers if people are injured or killed or if property is destroyed, as a result.

A federal judge in California told CarMax's attorney that after she found out how they sell cars, she warned her children "Don't you ever buy a 'certified' car from CarMax."

Many other car dealers make the same claims, cutting corners and rushing vehicles with killer safety recall defects to the market before they are ready to drive safely.

29. What are the laws against selling unrepaired recalled cars?
Federal Laws regarding unrepaired recalled cars:
  • It is a violation of federal law for car dealers to sell unrepaired recalled cars when they are "NEW." They can be fined or severely penalized if they violate the law.
  • It is also a violation of federal law, the Raechel and Jacqueline Houck Safe Rental Car Act, for rental car companies with fleets of 35 or more vehicles to rent, loan, or sell unrepaired recalled cars that are classified as "USED" because the rental car companies bought them before renting them to the public. (Rental car companies are also licensed car dealers who sell former rental vehicles to the public.)
  • The federal Safe Rental Car Act is named for two sisters who were ages 20 and 24 when they were killed by an unrepaired safety recall defect that happened when they were on their way home to Santa Cruz, after visiting their parents and friends in Ojai, California.
  • Federal law does not yet specifically prohibit other dealers from selling recalled used cars – a loophole that needs to be closed, so that the National Highway Traffic Safety Administration can crack down on dealers who violate the law, and get them to stop putting lives at risk, without anyone having to suffer damages or be injured or killed.

Even if you can't afford to buy a new car, or simply choose to buy a used vehicle, you still deserve a car that is safe and free from dangerous safety recall defects.

30. California state laws that may apply, regarding unrepaired recalled cars:

Depending on the specifics, it may be a violation of California's state consumer protection laws for a car dealer to sell an unrepaired recalled used car. Some of the laws that may apply include laws against:

  • negligence or wrongful death
  • violation of common law duty of care
  • violation of express warranties and / or the implied warranty of merchantability
  • unfair and deceptive acts and practices
  • fraud

In addition to other laws that may apply, California has a law that specifically prohibits dealers from selling vehicles that fail to comply with federal motor vehicle safety standards – a common reason for issuing safety recalls.

California Vehicle Code Section 24011:
"Whenever a federal motor vehicle safety standard is established under federal law (49 U.S.C. Sec. 30101 et seq.), no dealer shall sell or offer for sale a vehicle to which the standard is applicable, and no person shall sell or offer for sale for use upon a vehicle an item of equipment to which the standard is applicable, unless:
(a) The vehicle or equipment conforms to the applicable federal standard."

However, that law is rarely enforced, and car dealers frequently sell high volumes of unrepaired recalled vehicles that fail to comply with Federal Motor Vehicle Safety Standards for lights, airbags, seat belts, backup cameras, brakes, and other important safety features.

Some California consumers who bought unrepaired recalled used cars from car dealers fought back under existing state laws and won confidential settlements. But car dealers impose forced arbitration clauses to keep you from being able to pursue justice in court. So don't count on being able to hold the dealer accountable if you or others are severely injured or killed, or if your car catches on fire and destroys homes, offices, and other property.

31. The dealer says it's easy to get the recall repaired. Is that true?

Very often that is FALSE. Recall repairs may not be available for weeks, months, or even years. It is common for auto manufacturers to issue safety recalls, then fail to develop a fix for a long time. Software problems are especially common and difficult and time-consuming to properly diagnose.

Especially when millions of vehicles have the same defect, there are often severe shortages of repair parts, causing long delays. For example, the Takata airbag recall resulted in delays of over a year to obtain repair parts. Meanwhile, hundreds more people were injured or killed.

There's also a huge shortage of qualified automotive technicians who can perform safety recalls, causing long delays even when replacement parts are available.

Some recalls can be performed "over the air" without your having to take the car to a dealership authorized by the auto manufacturer to perform the repairs, but those tend to be the exception.

32. Are auto safety recall repairs free?

Sometimes. It depends on the age of the car, when the recall was first issued, and other factors.

Federal law requires auto manufacturers to provide free repairs for at least 15 years. Sometimes manufacturers opt to cover the cost of repairs for a longer period. But sometimes they refuse to pay for repairs after 15 years.

If the car is outside the 15 years, you may have to pay thousands of dollars out of your own pocket just to make the car safe to drive. Meanwhile, your life will be at risk.

Sometimes manufacturers refuse to cover the cost of repairing safety recall defects unless you first pay out of your own pocket for another expensive repair to a different part.

33. WARNING!!! BEWARE of HAZARDOUS REBUILT WRECKS AND FLOOD CARS

Super important: Arrange an appointment with a trustworthy expert auto technician / body shop to inspect the used car you buy, in time for you to return the car during the 3-day period, with less than 400 miles added to the odometer.

A typical car inspection costs approximately $150 - $200 and should include downloading the diagnostic error codes, evaluating the condition of the car and tires, putting the car up on a lift and looking for signs of prior damage from a crash or flood, checking the battery life on an electric vehicle or hybrid, checking for counterfeit or missing airbags, and checking for unrepaired safety recalls.

Today's cars are highly computerized and it takes special scan tools and diagnostics to identify hidden problems that are hazardous or extremely expensive to repair, so it pays to have a professional check out the car. If you can arrange to have the inspection done before you buy, that's even better.

NEVER rely on the dealer's inspection to tell you what you need to know. Unscrupulous car dealers deceive car buyers about safety inspections, giving the false impression you don't need to get your own inspection. But millions of vehicles with killer safety defects have passed car dealers' bogus "inspections."

A popular place to find reviews of auto mechanics and body shops: Car Talk's Mechanic's Files.

Vehicle history databases such as Carfax, Autocheck, and the National Motor Vehicle Title Information System (NMVTIS) provide different types of data regarding millions of potentially hazardous recalled cars, rebuilt wrecks or stolen vehicles. BUT -- those databases fail to tell the whole story. Auto fraud experts warn that it's very common for them to omit vitally important information and give car buyers a false sense of security that a car is OK when it's actually a ticking time bomb on wheels. DO NOT rely on them as an alternative to getting your own inspection of a vehicle that checks out OK online. But they can be a useful tool for eliminating vehicles that have major problems, without your having to pay to get that particular vehicle inspected.

CARS recommends: Check each of the databases for the information they provide, and avoid vehicles that are reported as: "open" safety recalls, prior wrecks, flood cars, lemon law buybacks, total loss vehicles, junk, salvage, "rebuilt," "reconstructed," or stolen vehicles, vehicles with airbags that deployed or were stolen, or other serious problems. Also check the Vehicle Identification Number (VIN) online, via a search engine. (For example, you may discover photos of it at a salvage auction, after a wreck or flood.) Even if the car checks out OK, still insist on getting your own inspection.

TIP: Other warning signs, or red flags: if the car was sold at an auction, had several owners, or came from a distant state or other country.

TIP: Flood cars are extremely dangerous. The electronic components that control major safety systems are prone to corroding and failing. They may also harbor bacteria, toxic substances, and other bio-hazards that can cause serious health problems, especially for people with allergies, asthma, and other chronic health conditions. Even if you live in a state far away from where the flooding occurred, does not mean you aren't at risk. Flood cars are often shipped from flood zones to where they can command the highest price, and where car buyers are less likely to be on the lookout for flood cars.

34. What else should I check, before I decide whether to keep a car or return it during the cooling off period?
  • Read the contract carefully and make sure the prices and other numbers are fair and that you're not being cheated over the terms of the sale or lease.
  • Check car pricing resources such as Kelly Blue Book or Edmunds to see whether you were overcharged for the car you bought or leased.
  • Also check car pricing resources to see whether you were shortchanged for the vehicle you traded in.
  • Check the contract for unwanted add-ons or add-ons that violate the CARS Act's bans on worthless add-ons, such as lifetime oil changes for an electric vehicle.
  • If you belong to a credit union, ask a financial manager to look over your contract and advise you about whether the interest rate and other terms of any loan are fair, or whether you could get a much better rate if you cancel the sale and change lenders.
  • If the dealer sold you "GAP" (Guaranteed Asset Protection), ask your own insurance company if they offer GAP for a more affordable amount. Typically, car dealers charge between $400 – $1,000 for GAP. But many auto insurers offer the same coverage for approximately $20–$60 per year, and it's easier to cancel the coverage if you sell the car or pay off the loan.
  • If you bought an electric vehicle or hybrid with a car battery, check to see how much longer the battery is likely to last, keeping in mind there are many variables, such as the outdoor temperature. Consumer Reports provides tips for used car buyers about how to find out how much longer the battery is likely to last.
  • Check for a fake number on the odometer. According to vehicle history provider Carfax, California leads the nation in vehicles that are suspected to have altered odometers – more than 532,200 vehicles. Odometer fraud is increasingly common and can cost you many thousands of dollars. It can also mean that any warranty coverage is void, and cause other headaches.
It is extremely easy for fraudsters to alter the electronic odometers in today's cars. All it takes is a few seconds and a cheap tool available for sale on the internet. A thorough inspection by an auto technician may discover odometer discrepancies. Vehicle history reports such as Carfax can also be useful. But keep in mind no history report tells the whole story and the data may be out of date, so a history report is not a substitute for a professional inspection by a trustworthy auto technician.
35. BEWARE!! CALIFORNIA USED CAR BUYERS HAVE LOST PROTECTIONS AGAINST USED CAR LEMONS

California's auto lemon law no longer covers used cars, even if you buy a car that still has a warranty from the manufacturer. This also includes battery warranties, which can be difficult or impossible to enforce.

This drastic change in the law is due to a decision by the California Supreme Court, Rodriguez vs. Fiat Chrysler of America.

CARS and other consumer groups filed amicus briefs seeking to preserve protections for used car buyers, but the California Supreme Court ruled against consumers, overturning decades of law that allowed used car buyers to use California's landmark auto lemon law to get refunds when unscrupulous auto manufacturers fail to honor their warranties.

Some other laws may apply, but auto manufacturers now argue that any case involving a used car means that you have to pay out of pocket for repairs, even when you already paid extra for a car with a warranty from the manufacturer. Unfortunately, they often win those arguments.

CARS recommends: Do NOT rely on the warranty to protect you from having to pay for major repairs. Instead, check out the car as thoroughly as possible before you buy, and again after purchase, during the 3-day cooling off period. Better to avoid a problem car than risk getting stuck with a used lemon that is unsafe and unreliable, and that costs you thousands out of your own pocket to fix.

36. Were you scammed by an unscrupulous car dealer?
Where to complain:
  • California's Attorney General – California's Attorney General has the authority to crack down on illegal activity involving the sale or leasing of motor vehicles. Attorney General Bonta supported passage of the CARS Act.

    The Attorney General's office also has a history of pursuing justice on behalf of car buyers who were harmed by illegal auto sales practices, including obtaining over $99 million in refunds for victims of predatory auto lending practices who were harmed by subprime auto lender Santander.
  • Your state legislators – they have the power to improve the law, and if they hear from enough of their constituents, may champion more improvements in the future. For example, many states have Used Car Lemon Laws that mandate warranties on used cars based on their price and / or mileage, while California still allows used cars to be sold "AS-IS."
  • Your Labor Union – they represent you in Sacramento and also need to know how you are being affected economically by auto scams.

Where to get personal legal advice: From a consumer attorney who specializes in representing people and small businesses that are harmed by car dealers who engage in illegal activities:
National Association of Consumer Advocates (NACA)

37. Want to know more about the CARS Act?

For the exact wording of the entire California Combating Auto Retail Scams (CARS) Act (SB 766, enacted in 2025), please visit:
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260SB766

38. Californians Submitted Comments in Favor of the FTC's CARS Rule

Many Californians wrote to the Federal Trade Commission, supporting the FTC's CARS Rule, which was overturned in court over a procedural issue (not the merits).

Sample comments:
"Trying to purchase a new vehicle in the last 3 years has been a stressful experience. I negotiated a price with a dealer on a new 2022 Subaru Outback from Subaru of Ontario in California, and was hit with add ons on the day of signing that I had not consented to, which included VIN etching and door edge guards. Since I needed a vehicle, I had to concede with their demands, even though I tried to negotiate it off, which took me about 9 hours to go through. I was not informed of these changes in the negotiations until the day I had to sign for the purchase."
"This year I've been shopping to buy a new vehicle from Southern California Toyota, Honda, and Nissan Dealers. I've talked to countless different sales people during this time. It is appalling how prevalent and shady the tactics now commonly used by dealers to take advantage of consumers. It didn't used to be like this. Bait and switch, hidden fees, market adjustments, useless dealer installed products, all different kinds of new scams. [...] The dealers have become so corrupt and disreputable that they can no longer be trusted to conduct business without strict new regulations in place."
Industry Comment, Rivian Automotive:
Industry comment from Rivian Automotive: "Rivian strongly supports this rulemaking as part of efforts to reduce harm to the car-buying public who might be subjected to deceptive pricing and sales tactics. [...] We encourage the FTC to move forward with this rulemaking, while asking the agency to consider a modernized approach that supports the smooth and transparent experience provided by direct-to-consumer sales. In the case of an online sale, a dealer should not be permitted to push additional add-ons to the purchase when the customer arrives at the dealership without undergoing the disclosure requirements outlined in the proposed rule."
"I live in Southern California and what has been happening recently with car dealerships is disgusting. Car dealerships are using the covid pandemic to capitalize on profits, they're charging $20,000 to $40,000 over MSRP due to a chip shortage. New cars are being sold with dealer optional add-ons that are over $10,000 but realistically only cost $500, yes they're lying to you. I hope sometime can be done to help regulate these unethical business practices."
"I have gone to a dealership and negotiated the price of a car with the salesperson. Then when I got back into the finance area to sign the papers.. the price for the car was suddenly higher. They would not drop the extra things they added to the car and it was a scam. It wasted my time and was a lot of pressure to get out of the bad deal. They should not be able to do that to customers."
"I am in the market to buy a new vehicle and it has been the biggest headache I've ever had purchasing a car. The mark ups are insane, the added accessories to most every vehicle is just absurd. [...] It makes me incredibly sad to know that so many uninformed people are getting taken advantage of. We are a military family that sacrifices a lot every day. Please help us protect our hard earned money. And please enforce these regulations. It won't solve the problem of getting taken advantage of. But, it will help."
** Disclaimer **
The information provided here is not intended as legal advice, and is not a substitute for getting legal counsel to advise you based upon all relevant facts, and all applicable regulations and laws.

Other state or federal consumer protection laws may also apply, in addition to the California CARS Act.
 

Bought an auto lemon in California?
Most lemon owners have to do more to get a refund.

CONSUMER ALERT for California auto and recreational vehicle lemon owners!! Don’t get stuck with a defective lemon car because you skipped this step.

Auto and RV manufacturers won major changes to California’s auto lemon law that make it harder for most owners of seriously defective “lemon” vehicles to get warranty repairs or a refund. The changes apply to lemon owners who purchase vehicles from:

General Motors, Ford, Fiat Chrysler / Stellantis (FCA), Hyundai, Infiniti, Isuzu, Kia, Mercedes-Benz, Mitsubishi, Nissan, Subaru, and other manufacturers who opted in to the new, anti-consumer version of the law.

The California Department of Consumer Affairs has posted a list of auto manufacturers who opted in to the new law. If the manufacturer of your car is on the list, your life as a consumer is now more complicated.

Before the changes to the law took effect, all you had to do was to take your faulty car to a manufacturer-authorized repair facility (usually one of their franchised dealerships) for repairs. The manufacturers were responsible for tracking the repairs and offering to “promptly” buy back vehicles that qualified as lemons. That makes sense, since the manufacturers are the ones that produce the defective vehicles. They also review and approve warranty repairs, including reimbursing their dealers for performing repairs. Plus they have their own attorneys, who should be familiar with the lemon law.

What has changed?

Now, most lemon owners are required to also notify the manufacturer directly, IN WRITING, in order to have the full protection of the lemon law. You must provide specific information, including:

  • The vehicle owner’s name.
  • The Vehicle Identification Number, or VIN, which must be “accurate.” You can find the VIN on a plate on the dashboard, and in the sales documents. It’s 17 numbers and letters. Take time to double-check that the VIN is correct.
  • A “brief summary of the repair history and problems with the vehicle.” It’s not clear from the new law exactly what will do the job. We suggest that you provide a complete list of all the problems that you have experienced, and of each of the times you attempted to get the vehicle fixed.
  • A demand that the manufacturer buy back the lemon, or provide a replacement vehicle. It’s not enough to tell the dealer or manufacturer “I don’t want this car anymore,” “I’m afraid to drive this car,” or “This car is a lemon.” You need to tell the manufacturer IN WRITING that you are demanding a buy back or replacement vehicle.

You must send this written message to one of two places:

By email: to the email address that the manufacturer of your defective vehicle has provided, which shows up on this list.

By snail mail: “by certified or registered mail, return receipt requested, to the address provided by the manufacturer in the owner's manual or warranty booklet.” The contact name and mailing address are also posted here, on the website for the California Department of Consumer Affairs.

When you send the written notice, you must still have possession of the vehicle, so don’t wait until you have traded it in to the dealership or sold it to someone else. You are also required to keep the car for at least 30 days from when the manufacturer has received the written notice.*

Plus you must inform the buyer IN WRITING about the problems you experienced with the car — even if it’s the dealer where you’ve been taking the car for repairs.**

Is calling the manufacturer’s toll-free number enough? NO!!

Even if you have called the manufacturer’s customer service number over and over again, and talked to agents of the manufacturer who say they have opened a case in your name, and they will get back to you, that is no longer enough to preserve all of the protections you need, under the lemon law.

If you don’t send a written notice that complies with the new law, the manufacturer can get away with refusing to fix your lemon or buy it back, without facing the civil penalty for willfully violating the lemon law. The possibility of having to pay a penalty is the #1 incentive for manufacturers to do the right thing when you have a lemon. Unless they face a significant penalty, they have little to lose by failing to fix your car or give you a refund.

Why do auto manufacturers want you to have to write directly to them, before you can benefit from the lemon law?

The reason the manufacturers desired a change in the law to require lemon owners to write to them directly was to make it super easy for them to screen out vehicle owners who haven’t taken that additional new step, and refuse to pay for warranty repairs to fix their cars — reducing their warranty costs.
 
Auto manufacturers know that most lemon owners will not be aware of the new requirement, or write to them and provide all of the required information, so they can get away with stonewalling and giving consumers the run-around, in hopes they will give up and trade in their defective cars at a huge loss.
 
Not surprisingly, the auto manufacturers who steered the lobbying effort to weaken California’s auto lemon law have the worst record of producing the most lemons, having to issue the most safety recalls, and having the highest warranty costs.
 
General Motors and Ford steered the battle to change the law. In the first half of 2025, Ford had warranty costs of over $2.8 billion and GM had warranty costs of over $2.5 billion.
 
In 2025, Ford broke records for having to issue safety recalls, recalling nearly 13 million vehicles due to serious safety defects — more than the next 9 auto brands combined.
 
How did the auto manufacturers get CA legislators to vote for weakening the lemon law?
 
For decades, CARS succeeded in not only blocking anti-consumer changes to California’s auto lemon law, but in expanding the law to cover vehicles purchased for business use and to include protections for military servicemembers stationed in, or deployed from, California.
 
However, the Consumer Attorneys of California (CAOC) sided with GM and Ford over the changes to the law, under threat of a ballot initiative that would have capped their attorneys’ fees — threatening their incomes.
 
The changes to the law were introduced using a sleazy tactic called a “gut-and-amend” — stripping out the contents of a bill on an unrelated topic, and inserting the unpopular provisions — just two weeks before the end of the legislative session, when the fate of hundreds of bills was being decided all at once. Many legislators complained about the unfair, rushed process and having to make a decision on such an important issue without the usual months-long scrutiny such a bill should get.
 
CARS worked night and day and fought back hard against the changes, which were also opposed by manufacturers such as Toyota (which produces relatively few lemons compared with GM and Ford), but most legislators caved in to GM, Ford, and the CAOC. Notable exceptions, who sided with consumers: Assemblymembers Rebecca Bauer-Kahan, Dr. Jasmeet Bains, Jacquie Irwin, and Cottie Petrie-Norris, and Senators Marie Alvarado-Gil, Angelique Ashby, Susan Talamantes Eggman, and Roger Niello.
 
Governor Newsom expressed reservations about the bill and insisted that the legislature enact another bill (SB 26) to allow auto manufacturers to opt out, as a condition of signing the bill.
 
* Here’s the actual quotation from the GM-Ford-CAOC changes to the lemon law (AB 1755):
 
California Code of Civil Procedure Section 871.24.
(a) At least 30 days prior to the commencement of an action seeking civil penalties under subdivision (c) of Section 1794 of the Civil Code, the consumer shall do all of the following:
 
(1) Notify the manufacturer of the consumer's name, the accurate Vehicle Identification Number ("VIN") of the motor vehicle, and a brief summary of the repair history and problems with the motor vehicle.
 
(2) Demand that the manufacturer repurchase or replace the motor vehicle.
 
(b) Minor deviations in the notice submitted pursuant to subdivision (a) shall not disqualify consumers from seeking civil penalties.
 
(c) At the time that notice submitted pursuant to subdivision (a) is sent, the consumer shall have possession of the motor vehicle.
 
(d) The notice required by subdivision (a) shall be in writing and shall be sent either by email to the email address prominently displayed on the manufacturer's website for this purpose or by certified or registered mail, return receipt requested, to the address provided by the manufacturer in the owner's manual or warranty booklet. The notice information on the manufacturer's website, owner's manual, and warranty booklet shall be provided in both English and Spanish.
 
** Here’s the actual quotation from the opt-out bill, SB 26, that requires auto lemon owners to inform the buyers IN WRITING about the problems with the vehicle and any legal action they may bring — even if the buyer is the dealer who has been attempting to repair the car, and is already familiar with its history.
 
(i) If a consumer sells their vehicle as authorized by subdivision (g), the consumer may not seek civil penalties under subdivision (c) of Section 1794 of the Civil Code unless the consumer provided to the prospective buyer or recipient of the vehicle, prior to the sale, written notice of the basis for the consumer's request for restitution or replacement from the manufacturer and of any pending action described in subdivision (a) of Section 871.20.

 


CARS President Awarded "2025 Legislative Advocate of the Year" Award 
CARS President Rosemary Shahan was recently awarded the "2025 Legislative Advocate of the Year" Award, presented by the Consumer Federation of California and the California Low Income Consumer Coalition, in honor of her work to win passage of the California Combating Auto Retail Scams (CARS) Act, a landmark first-in-the-nation law that will take effect on October 1 of this year.

Rosemary led the coalition that advocated for passage of the law, and worked closely with the author, Senator Ben Allen (D-Santa Monica) and his Legislative staffer Shoshana Levy, to overcome the vehement opposition from new and used car dealers and their trade associations, auto lenders, banking interests, the Chamber of Commerce, and the Civil Justice Association of California (including Big Tobacco, the oil industry, and other multi-national corporations that profit from causing horrific human misery).
Front row: Shelmun Dashan (Policy Director, Berkeley Center for Consumer Law and Economic Justice), Erika NGO (Legislative Director for CA Assemblymember Ash Kalra -- holding two awards, presented to her and to Assemblymember Kalra), CARS President Rosemary Shahan, National Consumers League Executive Director Sally Greenberg, Shoshana Levy (Policy Analyst for Senator Ben Allen -- holding two awards, presented to her and to Senator Allen), Yarissa Ramirez (Associate Director, Consumer Federation of California), and Heidi Pickman (Vice President of the small business organization, CAMEO Network)

Back row: Dani Kando Kaiser (Policy Advocate, California low-income Consumer Coalition), Megan Varvais (consumer advocate and Board Member, CARS Foundation), Robert Herrell (Executive Director, Consumer Federation of California), Ted Mermin (Director, California Low-income Consumer Coalition), Andrea Luquetta (Senior Counsel, Center for Responsible Lending), and Jamie Duong (Director of Operations and Development, Consumer Federation of California)

 


"New California laws rewrite car-buying rules with return policy and pricing reforms"
CalMatters
by Ryan Sabalow
December 26, 2025
"California lawmakers made major changes to the state's car-buying rules this year, including a controversial rewrite of the state law that allows buyers to get their money back if they are sold a defective vehicle and a right to return a used vehicle within three days.

After October 1, California's used car buyers will have a new right to return the car within 3 days for any reason, and get a refund. Dealers may charge a restocking fee, based on the price of the car.
After an intense lobbying push this year from automobile companies, dealers and consumer groups, more legislative battles over California vehicle purchases could follow in 2026. Sky-high car prices show no signs of falling, and a Republican-led Congress and the Trump administration have sought to thwart Newsom's goal of having 100% of new cars sold in California be zero-emission by 2035....

In the meantime, Gov. Gavin Newsom signed [Senator Ben] Allen's Senate Bill 766, creating a first-in-the-nation policy that allows a buyer to return a used vehicle for a full refund within three days if the purchase price was less than $50,000. Dealers can charge a restocking fee.

The law, which takes effect in October, also contains other protections for buyers intended to prevent them from getting suckered.

The law also prohibits dealers from charging for add-ons that have no benefit to the buyer, such as free oil changes for electric vehicles — which don't need oil changes.

'That is a huge deal,' said Rosemary Shahan of Consumers for Auto Reliability and Safety, which championed the bill. 'It's historic. It's going to make cars more affordable.'
. . . .
Brian Maas, president of the California New Car Dealers Association, said the law should make buying a used car more transparent and easier for consumers.

'The bill certainly is a net positive in terms of more transparency about the total price and advertising,' he said.

But he said the new law 'clearly imposed more responsibility on dealers,' which is why Maas said his group was extremely frustrated Newsom vetoed its bill that would have allowed dealers to raise document-processing fees by $175.
. . . .
Consumers face a watered-down lemon law
Newsom also signed Senate Bill 26, a bill that allows car manufacturers to opt out of changes to the state's lemon law that gives consumers a right to get their money back if they buy a defective vehicle — sometimes referred to as a "lemon."

The result is that California car buyers have different legal protections under the state's lemon law depending on which brand they buy."

Read more: CalMatters: "New California laws rewrite car-buying rules with return policy and pricing reforms"
 


 
 
 
 
FOR IMMEDIATE RELEASE: Tuesday, October 7, 2025
Contacts: Ben.Cheever@sen.ca.gov, 916-651-4024
 
Senator Allen Delivers Needed Transparency and
Consumer Protections for Car Shoppers
 
            SACRAMENTO – Senator Ben Allen (D-Santa Monica) celebrated the signing of SB 766, the California Combating Auto Retail Scams (CARS) Act, in order to increase affordability and reduce the risk of purchasing a used vehicle in California.

          "This bill will codify best-in-class protections for California car buyers – protecting folks from junk fees and imposing much-needed transparency on advertised car prices," said Senator Allen. "I'm very grateful to the Governor for recognizing the importance of this legislation. It'll make a real difference for consumers by making the car buying experience more fair and transparent."

          Key consumer protections provided by this bill are modeled after the Federal Trade Commission's Combating Auto Retail Scams (CARS) Rule, which was overturned by the federal Fifth District court solely on procedural grounds in a split decision before the Rule could take effect. Under Trump's appointees, the FTC has not re-issued the Rule, despite projections from leading economists that estimate the Rule would save American car buyers $3.4 billion annually.

          SB 766 adopts the FTC CARS Rule into state law, prohibiting car dealers from misrepresenting the price of the car while requiring them to be transparent about the full offering price and total payments. It also requires dealers to be transparent about add-on services or features that are optional, and prohibits them from charging for add-ons that will not benefit the consumer such as free oil changes for an electric vehicle.

          Going beyond the FTC CARS Rule, SB 766 provides a first-in-the-nation 3-day return period to provide consumers time to catch issues that may not have been caught during a short test drive, as well as to mirror standard practices for sellers. Customers will be able to return their vehicle and receive a full refund, and dealers will be permitted to charge a reasonable restocking fee.

          "We applaud Senator Allen's leadership in championing this landmark first-in-the-nation consumer protection legislation, and are thrilled that Governor Newsom signed it into law," said Rosemary Shahan, President of the non-profit consumer organization Consumers for Auto Reliability and Safety, which led the coalition in support of SB 766. "The California CARS Act is the most sweeping reform of protections for car buyers since the Car Buyers Bill of Rights was enacted in 2005. The 3-day cooling off period for used car buyers promises to be a game-changer."

          The same economists who analyzed the FTC CARS Rule conservatively project that SB 766 will save California car buyers $234 million annually, and an additional 8.5 million hours of time annually that would otherwise be spent haggling, navigating bait-and-switch practices, and negotiating unnecessary and expensive add-on products that offer little to no value to consumers.

          SB 766 will take effect on October 1, 2026 – a delayed implementation to allow car dealers to train employees and take needed steps to comply with the new law.
 
What others are saying
 
          "This bill is a significant step forward for California consumers and for an industry that has been allowed to get away with outrageous sales tactics for far too long," said Ted Mermin, director of the California Low-Income Consumer Coalition. "Today, when you ask a car dealer how much a car costs, you're going to get a three-hour wait in an office. When the CARS Act takes effect, you're going to get a direct answer."

          "This bill will help empower California car buyers to avoid being taken for a ride when they buy a new or used car," said Robert Herrell, Executive Director of the Consumer Federation of California.

          "The CARS Act will protect millions of Californians from costly auto sales scams and make the car-buying experience easier and more transparent," said John Van Alst, senior attorney at the National Consumer Law Center and director of its Working Cars for Working Families project. "We applaud the work of Senator Allen, the California Legislature, and Governor Newsom, and encourage state legislatures across the nation to act to protect auto buyers."

          "As the FTC abandons protections for car-buyers, it's great to see California stepping up to fight hidden costs and wasted time," said Sam Levine, Senior Fellow at Berkeley's Center for Consumer Law and Economic Justice, and former Director of the FTC's Bureau of Consumer Protection. "By requiring upfront prices and banning junk add-ons, the CARS Act will strengthen transparency and competition and save Californians money."

          "It's great to see California stepping up to help fill the void at the FTC in protecting car buyers from predatory car dealers and lenders," said Erin Witte, Director of Consumer Protection for the Consumer Federation of America.
Ben Allen represents the 24th State Senate District, which consists of the Westside, Hollywood, coastal South Bay, and Santa Monica Mountains communities of Los Angeles County.
 
 
 
 


 
 
NEWS Immediate Release: Thursday September 11, 2025

Contacts:
Ben Cheever, Press Secretary, Senator Ben Allen Ben.Cheever@sen.ca.gov, 916-651-4024
Rosemary Shahan, President, CARS, press@carconsumers.org, 530-759-9440
 
California Legislature Sends Bill to Make New & Used Cars More Affordable
To Governor Gavin Newsom
First-in-nation 3-day cooling off period for used car buyers
 
            At a time when the already-high price of cars is projected to skyrocket even more due to tariffs imposed by President Trump, the California legislature voted to pass SB 766, the California Combating Auto Retail Scams (CARS) Act, championed by Senator Ben Allen (D- Santa Monica), to make buying a new or used vehicle in California from a car dealership more affordable and less risky.

          "For years, car shoppers have often complained about deceptive practices that lead to higher prices or unfair deals," said Senator Allen. "The California CARS Act will make cars more affordable, and will benefit both car buyers and honest car dealers by making the car market in California fairer and more competitive," said Senator Allen.

          The first part of the bill is modeled after the Federal Trade Commission's Combating Auto Retail Scams (CARS) Rule, which was overturned by the federal Fifth District court solely on procedural grounds in a split (2-1) decision before the Rule could take effect. Under Trump's appointees, the FTC has not re-issued the Rule. Leading economists projected that the FTC's CARS Rule would have saved American car buyers $3.4 billion each year, plus 72 million hours annually otherwise spent shopping for cars, haggling over the price, being subjected to bait-and-switch practices, and getting stuck with unwanted, expensive add-on products that boost profits for car dealers and lenders, but are often of little or no value to consumers.

          The same economists, from Stanford, MIT, Clemson, University of Arizona, and University of Michigan, conservatively project that enactment of the CARS Rule provisions in SB 766 will save California car buyers $234 million in reduced search costs and another 8.5 million hours in time savings – each year the law is in effect. They did not evaluate the second part of the bill, which creates a new, first-in-the-nation 3-day cooling off period for used car buyers.
 
Key provisions of the California CARS Act
  • Requires car dealers to disclose the "total price" up front and in advertising, making car prices more transparent and enabling car buyers to comparison shop for a good deal online without having to spend hours at car dealerships just to find out the price.
 
 
 
 
  • Prohibits dealers from selling worthless add-on products that fail to provide any benefit to the car buyer, such as lifetime oil changes for an electric vehicle or service contracts that fail to cover pre-existing conditions like prior damage from wrecks or floods
 
3-day Cooling-Off Period for Used Car Buyers
 
          SB 766 will provide used car buyers, including ride share workers and small businesses that purchase or lease used vehicles that cost $50,000 or less, a new 3-day cooling off period. They will have the right to return the car for any reason within 3 days, for a full refund, minus a restocking or shipping fee. The fee is capped at 1.5% of the total cost of the car, with a minimum of $200 and a maximum of $600. The car can't be driven more than 400 miles. Dealers may charge $1 per mile for mileage over 250 miles. The car must be in the same condition, except reasonable wear and tear and any defect or mechanical problem that becomes evident and that the car buyer did not cause.

          The cooling off period will allow car buyers time to review the paperwork without being under pressure. Many will be also able to get the car inspected by an auto technician with the necessary diagnostic equipment for detecting odometer or emissions tampering, prior damage, latent safety defects, and other major problems. Car buyers will not have to file a lawsuit, go to arbitration, or prove they were cheated in order to return the car and get a refund.

          California Attorney General Rob Bonta led a coalition of 19 state attorneys general in support of the FTC's CARS Rule. In August, Attorney General Bonta sent legislators in Sacramento a letter expressing his support for passage of SB 766.

          "A car is the largest and most important purchase many Americans make. At a time when the FTC is falling down on its job of protecting American car purchasers, it's great to see California standing up for them," said FTC Commissioner Rebecca Kelly Slaughter.

          "People should be able to buy a car without constantly having to worry about getting tricked or ripped off. That's what this is about and frankly it's a no-brainer." said former FTC Commissioner Alvaro Bedoya.

          "We hope Governor Newsom will become the first Governor in the nation to enact this landmark legislation to help address the #1 source of consumer complaints: auto sales scams," said Rosemary Shahan, President of the non-profit consumer organization Consumers for Auto Reliability and Safety, which led the coalition in support of SB 766.

          "This bill will help empower California car buyers to avoid being taken for a ride when they buy a new or used car," said Robert Herrell, Executive Director of the Consumer Federation of California.

          "This bill is a significant step forward for California consumers and for an industry that has been allowed to get away with outrageous sales tactics for far too long," said Ted Mermin, director of the California Low-Income Consumer Coalition. "Today, when you ask a car dealer how much a car costs, you're going to get a three-hour wait in an office. When the CARS Act takes effect, you're going to get a direct answer."
 
 
 
 
 
          "The CARS Act will protect millions of Californians from costly auto sales scams and make the car-buying experience easier and more transparent," said John Van Alst, senior attorney at the National Consumer Law Center and director of its Working Cars for Working Families project. "We applaud the work of Senator Allen and the California Legislature and encourage state legislatures across the nation to act to protect auto buyers."

          "As the FTC abandons protections for car-buyers, it's great to see California stepping up to fight hidden costs and wasted time," said Sam Levine, Senior Fellow at Berkeley's Center for Consumer Law and Economic Justice and former Director of the FTC's Bureau of Consumer Protection. "By requiring upfront prices and banning junk add-ons, the CARS Act will strengthen transparency and competition and save Californians money."

          "It's great to see California stepping up to help fill the void at the FTC in protecting car buyers from predatory car dealers and lenders," said Erin Witte, Director of Consumer Protection for the Consumer Federation of America.

          For many months, car dealers and auto lenders and their trade associations attempted to kill SB 766. But the bill kept moving forward, thanks to "AYE" votes from Democrats. After many amendments were adopted to address concerns they raised, the dealers and lenders eventually dropped their opposition and the bill passed with widespread bi-partisan support. Dealers also demanded a delay before the bill will take effect. Legislators agreed to a delay of 10 months from the usual date – until October 1, 2026.

LINKS:
Consumers for Auto Reliability and Safety (CARS) blog, with more links, history, and details

CA comments in favor of the FTC's CARS Rule
 
– 30 –
 






   
 
 
 

California on brink of passing massive overhaul of car buying practices
First-in-nation 3-day cooling off period
for used car buyers,
including small businesses

 
 
 
 

Floor Alert
SUPPORT SB 766 (ALLEN)

Combating Auto Retail Scams (CARS) Act

SB 766 (Allen) will make buying a new or used car in California more affordable and less risky. SB 766 will benefit millions of California consumers and small business owners and help address the #1 source of consumer complaints. SB 766 will also benefit honest car dealers who currently are at a competitive disadvantage. Key provisions:
  • Requires improved car pricing transparency, allowing car buyers to better comparison shop.
     
  • Prohibits add-on items and services that fail to benefit consumers, such as lifetime oil changes for electric vehicles.
     
  • Reduces litigation by providing a new 3-day cooling off period for USED car buyers, helping them avoid common scams that cost vehicle owners billions of dollars, such as:
    • odometer fraud
    • rebuilt wreck frauds
    • "loan packing" of unwanted items
    • "clear coding" vehicles that fail to pass smog
       
  • Allows car buyers purchasing USED vehicles priced at $50,000 or less to return them for any reason, provided the vehicle is in the same condition and driven less than 400 miles. Allows car dealers to charge a restocking fee based on the purchase price.

Vote AYE on SB 766

 

 
 
 


 
 
 
 
July 2, 2025

Honorable Rebecca Bauer-Kahan
Chair, Assembly Committee on Privacy and Consumer Protection
California State Assembly
1021 O Street, Suite 5210
Sacramento, CA 95814

Re: SB 766 (Allen) Combating Auto Retail Scams (CARS) Act: SUPPORT

Dear Chair Bauer-Kahan:
 
          Consumers for Auto Reliability and Safety (CARS) strongly urges passage of SB 766 (Allen), the Combating Auto Retail Scams (CARS) Act. SB 766 includes key provisions modeled upon the Federal Trade Commission's Combating Auto Retail Scams (CARS) Rule, which was supported by California Attorney General Bonta, and would make buying new or used vehicles in California more affordable and less risky.

          Enactment of SB 766 is particularly important now, when tariffs are already increasing the price of new vehicles. For example, Ford Motor Company recently announced that due to the tariffs it is hiking up the Manufacturer's Suggested Retail Price of many popular models up to an additional $2,000.
 
California Attorney General Bonta:
The FTC's CARS Rule is Needed, in Addition to Existing Law
 
          SB 766 is needed to address persistent unfair and deceptive practices that continue to harm California car buyers, despite existing laws. As California Attorney General Rob Bonta stated: "[T]he new FTC rule is a necessary step to protect consumers as existing law has proven insufficient to stamp out widespread dealer misconduct....

          In 2022, Attorney General Bonta expressed his support for the FTC's rulemaking, which would establish new protections for car buyers nationwide, and will be instrumental in assisting ongoing state efforts to eliminate unfair and deceptive practices that victimize consumers and disadvantage honest businesses.

          'For many consumers, a vehicle is a necessity and can be the most expensive one-time purchase they ever make. That car or truck can be a lifeline that takes them to school, a job, or back home to their families,' said Attorney General Bonta. 'Unfortunately, car dealers too often fail to honor advertised prices, tack on

 
 
 
 
 
unnecessary add-on products, or engage in other deceptive practices. As attorneys general, we know these practices harm low-income consumers and we need more tools in the toolbox to address persistent unfair and deceptive practices in the auto sales industry.'

          ....[T]he FTC's CARS Rule is necessary to protect consumers from misconduct that remains widespread and pernicious, in spite of existing regulation. As states' top law enforcers, the attorneys general know unfair and deceptive business practices in the automotive sales industry are a pervasive problem and are first-hand witnesses to ongoing violations of existing law. States have a long history of protecting consumers in the automotive sales industry through investigations, settlements, and enforcement and have found existing law has proven inadequate to address persistent unfair and deceptive practices in the automotive sales industry.

          In 2022, Attorney General Bonta announced a $27.5 million settlement with the now-defunct Paul Blanco's Good Car Company resolving allegations that the company engaged in unlawful business practices, including false advertising about credit and discount programs, making false statements on credit applications, and deceiving customers into purchasing add-on products. Through a judgment entered with the court, the company admitted to and agreed to be held liable for publishing 650,000 false advertisements, defrauding auto lenders by misrepresenting vehicle values on 20,000 occasions, and deceiving consumers regarding add-on products. Mr. Blanco also accepted a ten-year ban on participation in the California auto industry....Paul Blanco's deceptive radio and television advertisements targeted vulnerable, predominantly low-income consumers with subprime credit, promising easy approval for unrealistically low interest rates to lure unsuspecting consumers to their dealerships...."

          In addition to states' enforcement experiences, consumers themselves have made voluminous reports of their experiences falling victim to deceptive practices when purchasing cars. Further, complaints to the Better Business Bureau about new and used auto dealerships numbered in the tens of thousands annually, and from 2020 to 2021 were the second highest of any industry.

          In the brief, the coalition [of state Attorneys General] argues that the CARS Rule is tailored to address the noncompliance state attorneys general see in their enforcement role, and that FTC's move to add specificity to industry regulations is a reasonable—and important—way to reverse the trend of noncompliance that remains in spite of the existing, pre-CARS Rule regulations. The CARS Rule does so by taking important steps to address these problems by prohibiting dealers from making misrepresentations and charging for add-ons that provide no consumer benefits, and by strengthening disclosure and record-keeping requirements. The coalition asserts that CARS Rule is an important supplement to existing authorities and would provide the states with much-needed ammunition in their ongoing efforts to detect and remediate unfair and deceptive practices in automotive sales."1
 
Cost and Time Savings for California Consumers
 
          According to a thorough, robust, and authoritative analysis by the U.S. Federal Trade Commission, the Combating Auto Retail Scams (CARS) Rule provisions requiring transparency and full disclosure of the actual out-the-door price and reducing fraud involving high-cost add-ons of little or no real value would save American car

_______________________________
1"Attorney General Bonta Supports Biden Administration Effort to Protect Car Buyers." News release issued May 22, 2024. Posted at: https://oag.ca.gov/news/press-releases/attorney-general-bonta-supports-biden-administration-effort-protect-car-buyers
 
 
 
 
 
buyers $3.4 billion each year, and also save car buyers 72 million hours annually otherwise spent shopping for vehicles and haggling over the prices.

          Note: The opponents of SB 766 cite a so-called "comprehensive study" for their misleading claim that somehow enactment of SB 766 would add to the time it would take for car buyers to purchase a vehicle from a dealer. However, it is important to note that the study lacks credibility, since it was performed at the request of the National Automobile Dealers Association and was based upon a survey of a mere handful of auto dealers –hardly an unbiased source or sufficient numbers to be either objective or rigorous.
 
Cost Savings for California Courts
 
          Contrary to claims by opponents, SB 766 will NOT increase court costs. As the opponents have conceded, misrepresentations and false advertising are already actionable under the Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. Also, nearly all car dealers and auto lenders who sell and finance vehicles in California include mandatory private arbitration clauses in their sales and leasing contracts, which means such cases rarely go to court at all.

          In fact, it is likely that as a result of SB 766 significantly fewer car buyers will need to resort to litigation or arbitration. By allowing used car buyers to return used vehicles costing $48,000 or less for a refund without having to engage in litigation or arbitration, SB 766 will reduce the need for many victims of unscrupulous car dealers to file lawsuits in court or cases in arbitration. Instead, consumers would be able to simply return the car within 3 business days and obtain a refund, minus a reasonable restocking fee.

          A typical example of the type of fraud SB 766 addresses involved a severely rusted car purchased by William Bradley, who resides in Placer County. According to Mr. Bradley:
    "On April 2nd [2024], my wife and I went to check out a 2003 Subaru Baha we found for sale at an independent auto dealership in Roseville. I looked it over carefully, including taking a look underneath, and saw nothing that set off any alarms. Undercoating was present but appeared to have been a preventative measure against rust.

    I asked the salesperson about the condition of the car and its history, and he said it had recently passed a safety inspection. He specifically said that they had inspected it for rust, since it had come from Pennsylvania, and it checked out OK. The salesman also handed me a "clean" Carfax report.

    I took him at his word, since he's a professional and in a position to know about the car. I paid $10,500 in cash. Then I took the car to an independent mechanic who hoisted it up on a lift. Initially my mechanic believed the car looked clean and was impressed with the low mileage.

    However, we were both shocked at what he found. The entire undercarriage was corroded due to rust. Brake components, steering, suspension and frame were rusted beyond repair. He said that the rust was covered up by an extremely heavy layer of undercoating over top of duct tape to hide the damage. He warned me not to drive it at all, since it was grossly unsafe. He refused to perform a road test.

    I took the car to Roseville Toyota for a second opinion, and they told me the same thing. They couldn't use a hoist, as the frame began to bow and crumble.
 
 
 
    I contacted the dealership where I bought the car and they told me too bad, I bought the car 'AS IS,' so basically I was stuck."
          In an endeavor to get his money back, Mr. Bradley had to hire an attorney and file a lawsuit. Over a year later, he is still unable to drive his own car and is still in litigation against the dealership that sold him the unsafe car, which is attempting to compel arbitration. If SB 766 were the law, Mr. Bradley would be able to get a refund without having to file a lawsuit.
 
Cooling-Off Period is a Necessary Antidote to High-Pressure Sales Tactics and Fraud
 
          By allowing used car buyers time to get vehicles inspected by skilled auto technicians with access to computerized diagnostic equipment and lifts, the cooling off period in SB 766 would help address typical auto sales scams involving used cars, including:
  • Salvage, flood, and rebuilt wreck frauds: According to Carfax, "damage from accidents and other causes is common. Carfax data shows as many as 40% of vehicles on the road sustained damage – about 110 million cars in the U.S....In fact, of all the used cars for sale now...about 1 in 4 have sustained damage."2

    Every time there's a hurricane, flood cars – which tend to be terribly unsafe and beyond repair – end up being shipped from the states there the disaster happened to California, where they are sold to unsuspecting used car buyers (as Mr. Bradley's experience cited above illustrates).
     
  • Recalled used car roulette: Too often, unscrupulous car dealers sell used vehicles with potentially deadly safety recall defects, such as wheels that fall off, brakes that fail, loss of steering, catching on fire, and ticking time bomb Takata airbags that have caused dozens of fatalities and hundreds of debilitating injuries, including blindness and brain damage. Often, victims of this dangerous practice encounter lengthy delays in obtaining repairs. Tragically, some owners and passengers have been injured or killed. One report found that approximately 25% of vehicles CarMax offered for sale in California had at least one unrepaired safety recall defect. Many had multiple safety recall defects.3 More recently, CarMax's own Board Chair openly admitted they fail to remedy safety recall defects.4 AutoNation also has a well- documented record of selling vehicles with unrepaired safety recall defects.5
_______________________________
2 "Don't Let Accident Reports Steer You Away from a Used Car," Carfax, Feb. 23, 2021, posted at: https://www.carfax.com/buying/buying-a-used-car-that-has-been-in-an-accident

3 "Used Car Roulette: CarMax Doubles Down on Selling Unrepaired Recalled Vehicles," by Consumers for Auto Reliability and Safety Foundation, Massachusetts PIRG, and Frontier Group, Sept. 28, 2017, posted at: https://frontiergroup.org/resources/used-car-roulette/

4 CarMax Board Chairman Tom Folliard, speaking at Florida Tech, posted at: https://www.youtube.com/watch?v=Bg5CV264mGg

5 "Unsafe Used Cars for Sale: Unrepaired, recalled vehicles at AutoNation dealerships," by CARS Foundation, US PIRG Education Fund, and Frontier Group, Oct. 20, 2019, posted at: https://pirg.org/resources/unsafe-used-cars-for-sale/

 
 
 
 
 
  • Clear-coding: Some car dealers temporarily disconnect the battery or use a cheap device to erase the error codes, so the "check engine" light goes off until the car is driven far enough (usually roughly 100 miles). Then - after the consumer has purchased the car -- the "check engine" light comes back on again, indicating the car has problems and may not pass California's emissions testing and therefore cannot be legally operated in our state. As the Coalition for Clean Air asserts in their letter of support for SB 766, this practice is all too common and calls for providing used car buyers with a window of opportunity to return their vehicle for a refund, after they realize they were sold a seriously defective used car.
     
  • Odometer fraud: According to the National Highway Traffic Safety Administration, odometer tampering costs consumers $1 billion a year. Also, "it can be difficult, but not impossible, to detect whether an odometer has been altered."6

    While odometer fraud is difficult for most consumers to detect, an experienced auto technician can often spot telltale signs of odometer tampering. "For digital odometers, you'll likely need a professional to investigate. Some dealers will only clear the numbers on the dash but leave the data in the ECU [Electronic Control Unit]....Bringing in someone experienced and with the tools can help you detect odometer fraud. They can run various diagnostic tests and uncover tampering in various areas."7

    According to vehicle history report provider Carfax, rolling back an odometer has never been easier and odometer fraud remains a widespread and serious issue for used car buyers across the country. Carfax warns that "In 2024 alone, more than 2.14 million cars on the road may have had their odometer rolled back....It can take a bad actor just seconds to roll back an odometer, causing unsuspecting buyers to lose an average of $4,000 in value...not to mention the additional costs of unexpected repairs and potential safety risks."8
     
  • Churning: Dishonest car dealers engage in the predatory practice of selling vehicles that break down soon after purchase, on terms that are unaffordable, then repossessing them when the owner stops making payments and reselling the same car over and over again, each time making an excessive profit.

    For example: California's former Attorney General Becerra and 33 other state attorneys general sued the nation's largest subprime auto lender, Santander, over its deceptive and predatory lending practices, which resulted in an appallingly high default rate of 70%. The nationwide settlement totaled over $550 million
_______________________________
6 National Highway Traffic Safety Administration (NHTSA), "Odometer Fraud," posted at: https://www.nhtsa.gov/vehicle-safety/odometer-fraud

7 "Odometer rollback: How to avoid Fraud" OBDEleven, April 2, 2024, posted at: https://obdeleven.com/odometer-rollback?srsltid=AfmBOooNmSEoAf4StqDJjumzDKP0g4J-oncPmHu0lZHXvrHgplycYe6d

8 "Carfax" Odometer fraud increases nationwide to 2.4 million vehicles," Carfax, PR Newswire, Dec. 10, 2024. Posted at: https://www.prnewswire.com/news-releases/carfax-odometer-fraud-increases-nationwide-to-2-14-million-vehicles-302327017.html

 
 
 
 
 
    dollars. Californians who were harmed received over $99 million in refunds.9

    This devastating practice is so prevalent and so outrageous that it got the attention of Last Week Tonight journalist John Oliver, who produced an episode that has garnered over 13 milllion views on YouTube, featuring a vehicle that a car dealer in California sold, repossessed, and sold again eight times in just three years.10
          Finally, it is important to note that even vehicle history report provider Carfax recommends that consumers get vehicles inspected by a trained automotive mechanic who can identify serious problems that are not apparent in vehicle history reports. "It's always a good idea to take any used car you're seriously considering to a mechanic to check it out and ensure it's in good working order. They have the expertise and equipment to check for things you can't see."11

          For all of the reasons stated above, we strongly urge your AYE vote for SB 766. Thank you for your consideration.

 
   Sincerely,

      Rosemary Shahan

      Rosemary Shahan, President
 
 
 
 
1107 Ninth Street, Suite 560 • Sacramento, CA 95814 • 530-759-9440 • www.carconsumers.org.
 
 
 
_______________________________
9 Attorney General Becerra Announces over $550 Million Settlement Against Nation's Largest Subprime Auto Financing Company for Deceptive Auto Loan Practices, Press release, May 19, 2020, posted at: https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-over-550-million-settlement-against-nation%E2%80%99s

10 "Auto Lending," produced by John Oliver, Last Week Tonight. Posted at: https://www.youtube.com/watch?v=4U2eDJnwz_s

11 "How to Buy a Used Car: A Checklist," Carfax, Feb. 18, 2021, posted at: https://www.carfax.com/buying/car-buying-checklist

 
 
 
 
VIDEO of hearing, debate and vote on SB 766 (Allen) in CA Assembly Committee on the Judiciary July 1, 2025
 
 
 
 
VIDEO of hearing, debate and vote on SB 766 (Allen) in CA Assembly Committee on Privacy and Consumer Protection July 16, 2025
 
 
 

CONSUMER ADVOCATES APPLAUD FTC FOR MOVING FORWARD WITH CARS RULE

December 12, 2023 | Press Release
 

WASHINGTON, D.C. – The Federal Trade Commission (FTC) announced its final rule targeting deceptive conduct in the sale and financing of motor vehicles, titled the "Combatting Auto Retail Scams" (CARS) Rule.

After a decade of attempts to fix a broken auto marketplace, the FTC announced in July 2022 that it was pursuing an auto dealer rule aimed at ending bait and switch pricing tactics and junk fees in the form of worthless add-on products and services. After receiving over 25,000 comments from the public and widespread support for addressing auto dealer misconduct, the FTC has published its final rule, summarizing the comments and laying out its plan for the CARS rule.

"The time is long overdue for the FTC to level the playing field for car buyers and honest dealers," said Erin Witte, Director of Consumer Protection at Consumer Federation of America. "The CARS Rule will bring some improvements to the auto market, and we look forward to working with the FTC to ensure that all consumers, especially those in vulnerable populations, are prioritized throughout the process."

The CARS Rule prohibits misrepresentations about key information, like price and cost, and requires dealers to provide the offering price, tell consumers add-ons are optional, and give information about the total payment when discussing monthly payments. The rule also prohibits dealers from charging for any add-on that has no benefit to the consumer.

"We applaud the FTC's efforts to help millions of Americans through the use of its rulemaking authority to bring a level of transparency to auto sales," said John Van Alst, senior attorney at the National Consumer Law Center and Director of its Working Cars for Working Families Project. "We look forward to continuing to work with state and federal policymakers to address discriminatory practices and bring transparency to the car sales and finance markets."

The Rule also includes clear protections for members of the military and their families who are targeted with deceptive information about whether dealers are affiliated with the military and face other issues specific to servicemembers.

"The FTC has taken the courageous step of addressing the top consumer complaint in the country: auto sales," said Rosemary Shahan, President of Consumers for Auto Reliability and Safety. "This rule should benefit both consumers and honest car dealers, who wrote in support of the proposed rule and complained about being at a competitive disadvantage because of unscrupulous car dealers who lure car buyers with false promises of low prices, then jack them up using sneaky tactics."

"Consumers are beyond frustrated with the deceptive practices some unscrupulous dealers use to jack up the price of cars," said Chuck Bell, advocacy programs director for Consumer Reports. "The FTC's new rule will protect consumers from shady bait and switch sales tactics and help ensure that car dealers provide fair and accurate prices for vehicle purchases."

The CARS Rule will take effect on July 30, 2024. The FTC has created new guidance for consumers to help them understand their rights when they buy a vehicle as well as guidance for auto dealers with advice to help them prepare for the rule to go into effect.

"We know all too well how car buyers across the country are ripped off by unscrupulous auto dealer sales and financing tactics," said Christine Hines, legislative director at National Association of Consumer Advocates. "We appreciate that the FTC has taken action to provide protections for consumers in this market."

"We are thrilled that the Federal Trade Commission has issued its CARS rule today bringing some badly needed consumer protections to Americans looking to buy or lease a vehicle," said Mitria Spotser, vice president and director of federal policy at the Center for Responsible Lending. "This rule will help curb dishonest sales and financing practices in the industry. The steep rise in automobile prices over the past few decades means we need to be doubly vigilant of junk charges and financing scams, especially given current interest rates."


 
 
 


BEWARE: Your family's safety is at risk
Greedy car dealers threaten lives, downplay the risks posed
by deadly safety recalls
Don't be tricked into buying a deathtrap on wheels
 
When car dealers want to make a killing by selling you a dangerously defective car at top dollar, can you trust them to tell you the truth about how hazardous it is?

Nope. Car dealers know that if you are aware how serious the safety recall defects are, chances are very good you won't buy that car, and that would cut into their profits.

So if a car dealer tells you anything at all about the safety recall defects, they usually try to trick you into thinking they're nothing to worry about. Just something minor. But don't fall for it. In reality, safety recall defects are often deadly. They injure and kill car buyers and their children, other family members, and other victims at an alarming rate.

But that doesn't stop car dealers from seeking to profit from selling the hazardous cars without bothering to get the free safety recall repairs done first.
 
CarMax: Multi-billion $$ Scamster

CarMax is the largest retailer of used cars in the U.S. It's a multi-billion $$ company that routinely sells vast numbers of hazardous recalled cars and has some of the worst practices in the used car industry.
 
 
In a shocking video, CarMax's former CEO / current Board President Tom Folliard minimizes the risks posed by safety recalls, while speaking at a public forum hosted by Florida Tech that included many college students, who are at high risk of being injured or killed in a car crash. In fact, for most of them, a car crash is the most likely cause of death for their age group.

After boasting about his lucrative career at CarMax, Folliard (estimated net worth: "at least $125 million") took questions from the audience. When asked about how CarMax handles safety recalls, his response was stunningly reckless and misleading.

First, he said that because CarMax is not a manufacturer, they can't fix safety recalls.

Is that true? Yes and no. It's true that CarMax isn't a manufacturer. But it's false to say that means that CarMax can't get safety recalls fixed. All CarMax has to do, is hire some more employees to take the recalled cars to nearby dealerships that are authorized by the manufacturer to perform safety recall repairs. And get this: the repairs are free, for at least 15 years from when the recall was issued. So there's really no excuse for CarMax to neglect this vitally important step, especially when they advertise that all their vehicles must pass a rigorous inspection. They're just too cheap to hire enough employees to do the job.

Worst of all, Folliard downplayed the risks posed by safety recall defects, telling the audience:

"Many of them are not really safety issues, they're just open recalls. But because of all the consumer movement around it, they're all considered safety recalls."

Is that true? NO!!!
 
Let's look at the facts.

According to the National Highway Traffic Safety Administration, ALL safety recall defects are serious.
 
 
Tragically, unrepaired safety recall defects continue to cause thousands of horrific, debilitating injuries and kill people.

Typical safety recall defects include:
  • catching on fire - some people have burned to death
  • loss of steering, including steering wheels that literally come off in the driver's hands
  • faulty brakes that can cause a crash
  • sticking accelerator pedals that cause cars to speed out of control
  • seat belts that fail to work when they're needed in a crash
  • child safety seat latches that come undone in a crash
  • Takata airbags that explode with excessive force and propel metal shrapnel into drivers' and passengers' face, neck and torso, often causing blindness or bleeding to death
 
 
The U.S. Federal Trade Commission warns consumers about the hazards posed by unrepaired auto safety recalls

"Unrepaired auto recalls pose a serious threat to public safety. Car manufacturers and the National Highway Traffic Safety Administration have recalled tens of millions of vehicles in each of the last several years for defects that pose significant safety risks to consumers. In 2015, for example, recalls affected 51 million vehicles nationwide. And defects that have been the subject of recalls have led to severe injuries and even death for many consumers."

Source: Statement of the Federal Trade Commission Concerning Auto Recall Advertising Cases (December 15, 2016)
The U.S. Federal Trade Commission warns: "Unrepaired auto recalls pose a serious threat to public safety."
 
 
Mike Jackson --- New 10-16-14
Mike Jackson, CEO of AutoNation, talks candidly about safety recalls.   Source: Tramel33166 at English Wikipedia., CC BY-SA 3.0 , via Wikimedia Commons
Who else warns about how dangerous safety recalls are? It isn't only government officials and safety experts. It's also industry insiders, such as the CEO of CarMax's #1 competitor, AutoNation, the largest new car dealership chain in the U.S.
Mike Jackson, the CEO of AutoNation, told Automotive News:

"These are not that the wrong tire-pressure sticker is on the car or some other little minor item....These are significant safety recalls, and we feel the time has passed that it's appropriate to take a vehicle in trade with a significant safety recall and turn around the next day and sell it to consumers."
-- AutoNation CEO Mike Jackson, quoted in Automotive News, "Used-Car Loophole Tightens up," February 8, 2016.
 
 
 
text resize Decrease Font Size Increase Font Size

C.A.R.S. Mission
CARS is a national, award-winning,
non-profit auto safety and consumer
advocacy organization working to
save lives, prevent injuries, and
protect consumers from
auto-related fraud and abuse.

THANK YOU!
to everyone who has supported CARS' work, including the more than 573,500 people who have contributed financially
to CARS, and signed or shared CARS' petitions. YOU are helping save precious lives!!

Donate here
 

 
Follow us on Twitter   Follow us on Twitter
 
Thanks!
 

 
Twitter blocked our
original CARS account
because we told the truth
about dangerous recalled cars,
Trump, and AutoNation

Follow us on Twitter
Here are the two tweets Twitter censored:

 

 
Read more at American Prospect:
"What's Up With Twitter's Content Moderation Policies?"  

 
DANGER!!!
 
CarMax sells cars with
deadly safety recall defects.
 
ABC's 20/20 went undercover and caught
CarMax up to their sneaky tricks.
 
 
More than 730,000 viewers have watched this video clip on CARS' YouTube channel
 
Help save lives -- share the link!

Take Action
 
Sign C.A.R.S.' petition (so far, signed
by over 117,000 people like you):
Tell CarMax to stop selling unsafe,
recalled cars to consumers
Take Action

 
Find us on Facebook
 
Learn more
about the
CARS Foundation
 
Follow us on Twitter
 
Help tell the
world that
We NEVER Surrender!
 
 
Follow us on Twitter
 
Visit StopKillerCars.org today!
 

 
Buyer Beware! Auto dealers use
forced arbitration
to get away with cheating customers
Even when car dealers flagrantly violate consumer protection laws, you may not be able to get justice. That's because almost 100% of car dealers stick "forced arbitration" clauses into their contracts. If they cheat you, and you try to take them to court, they can just laugh at you. That's because they can get your case kicked into arbitration -- a secret, rigged process that favors big, corrupt lawbreakers. The dealer often gets to choose the arbitration firm, and even the arbitrator who hears your case. Unlike judges, arbitrators are perfectly free to ignore the law.

Dealers claim that arbitration is quick. But Jon Perz in San Diego had to wait over 8 years in "arbitration limbo" before he finally got justice, after Mossy Toyota sold him an unsafe car. CARS produced a short video exposing what happened. More than 1.3 million people have watched our video on YouTube:
See the billboard CARS displayed
right next to Mossy Toyota's car lot,
and read more about how Jon finally won.

 
Please Donate to CARS