Since October 1, a California buyer who signs for a used car at a dealership can change course for three calendar days. The right comes from the state’s Combating Auto Retail Scams Act, known as the CARS Act, which became operative on that date. It has limits on price, mileage and the type of seller, and a fee that comes out of the refund.

Which purchases the cancellation right covers

The law is Senate Bill 766, Chapter 354 of the Statutes of 2025, approved October 6, 2025. As printed in the bill text, the cancellation right applies to a used vehicle sold or leased at retail for $50,000 or less by a licensed California motor vehicle dealer. It does not apply to used vehicles sold at auction or to vehicles priced above $50,000. Section 1784.28 says the title “shall become operative on October 1, 2026.”

The National Consumer Law Center, in a roundup of consumer laws first published January 5, 2026, describes the same change as a dealer being “prohibited from selling or leasing specified used vehicles without providing” a “three-day right to cancel the purchase or lease.” Its summary leaves the list of covered vehicles to the statute.

For a buyer who signed for a used car and regrets it, the way out is the three-day right, if the car cost $50,000 or less and came from a licensed dealer, and if it has not been driven more than 400 miles. The dealer must give the buyer a separate document titled “3-Day Right to Cancel Used Car Purchase or Lease,” and a notice has to appear on the first page of the agreement. A buyer who never received that separate sheet has a concrete document to ask about. Any waiver of the law’s provisions by a consumer “is contrary to public policy and is unenforceable and void,” according to section 1784.21.

The dealer’s restocking fee is the number that moves with each deal, because it is 1.5 percent of the sale price, with a $200 floor and a $600 cap.

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How the three days and the 400 miles work

The three days are counted as “the three calendar day period commencing the calendar day after the purchase or lease is executed.” A deal signed on a Friday gives the buyer through Monday. Weekends count, because the law says calendar days.

A mileage limit applies too. Under section 1784.43(a)(1)(B), the right to cancel does not apply if the used vehicle has been driven more than 400 miles, measured from the signing of the agreement to the day the buyer tries to cancel. The vehicle also has to come back in the same condition as when the dealer delivered it, apart from reasonable wear and tear.

What canceling costs

A dealer cannot charge a buyer for the right to cancel, according to section 1784.43(b)(4). The one permitted charge is a restocking fee, defined in section 1784.31(g) as one and one-half percent of the sale price, but not less than $200 and not more than $600. On a $20,000 car, 1.5 percent works out to $300. If the car has been driven more than 250 miles, an additional $1 per mile applies, capped at $150. That fee is deducted from the refund.

The refund itself is due “no later than 48 hours after the buyer or lessee exercises the right to cancel,” and the bill requires a full refund minus any deduction the section allows. The law also prohibits failing to refund the down payment on time. If the dealer has not sold or begun transferring the title on a trade-in, the dealer must return the trade-in. If it has, the refund for the trade-in is the greatest of the agreed value, the sale price or fair market value, less any loan still owed on it.

The add-on rule in the same law

The same statute limits what a dealer can charge on top of the price of the car. Section 1784.42(a) states that a dealer may not charge for an add-on product or service if the buyer would not benefit from it. The National Consumer Law Center summary lists the ban among the law’s provisions, saying it “prohibits charging for certain items, including an add-on product or service.”

The cancellation right and the add-on rule both took effect on the same operative date, October 1, 2026.

Using the three days well

The statute’s text is free to read at the LegiScan page for SB 766, and the three-day count starts the day after the contract is signed. A buyer weighing a cancellation can pull out the purchase agreement and the separate cancellation disclosure, find the date of signing, and count three calendar days from the next day. The odometer reading at signing, written on the paperwork, lets the buyer compare against the 250-mile and 400-mile marks.

It helps to put the cancellation in writing and keep a copy, since the 48-hour refund clock starts when the buyer exercises the right. The paperwork should show the price, which determines the restocking fee, and any trade-in, which has its own refund rule.

The effective date and the three-day right both trace to Chapter 354, Statutes of 2025, which was approved October 6, 2025.

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This article was produced with AI assistance and edited for accuracy against the sources linked above.