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Consumers could be expected to fork over hundreds of dollars
A NEW law will allow car buyers to return a vehicle with no questions asked – but there is a catch.
Lawmakers are hoping that the change will put power back in the hands of consumers and make car purchases more affordable.
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California Governor Gavin Newsom signed the Combating Auto Retail Scams Act, or CARS Act, introducing a three-day return window for used cars purchased through licensed dealerships.
“You don’t have to prove anything. You don’t even have to give an explanation. It’s just, ‘I don’t want it. I want out of this deal,’ and the law requires the dealer to give you a refund,” Rosemary Shahan, president of Consumers for Auto Reliability and Safety, told local CBS affiliate KFMB.
The bill, signed into law on October 6, includes used cars that are financed or leased, as well as commercial vehicles, including those purchased to provide ride-share services or used for small businesses.
“If you’re an Uber or Lyft driver and that car is your livelihood, or if you have a small business, like you’re a carpet cleaner with a few vans, you’re covered under that return policy,” Shahan said.
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Despite the law’s no-questions-asked policy, returners will be on the hook for a few hundred dollars.
Car buyers will have to pay a restocking fee of $200 to $600 depending on the car’s purchase price.
The car must also have driven less than 400 miles since the date of purchase to the time it’s returned.
It must have no damage beyond the imperfections that existed upon purchase.
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The new law applies only to used cars bought at a licensed dealership for less than $50,000, which could exclude some luxury vehicles.
Cars bought new or directly from another person are not covered under the law.
Purchasers are also given 10 days to pay dealers for any add-on product or service, instead of immediately.
The law will also require dealers to clearly disclose pricing to prevent consumers paying for unnecessary add-ons, like charging for oil changes for electric vehicles.
“When it comes to used cars, trust is the biggest issue. You’re removing the biggest barrier to entry by giving people a cooling off period,” said Ivan Dury, Director of Insights at Edmunds.
Dealers will also be required to keep all documentation related to advertisements, contracts, add-ons, and returns for at least two years, allowing regulators to investigate possible misconduct.
“That is a huge deal,” said Shahan.
“It’s historic. It’s going to make cars more affordable.”
The law will roll out in October 2026 to give dealers time to update their record systems.
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