California SB 766 (CARS Act), ExplainedWhat Changes for California Dealers on October 1, 2026
For the current bond product, see the California motor vehicle dealer bond page. For a step-by-step pre-October checklist, see our CARS Act compliance checklist.
- What: California's state-level CARS Act — honest pricing, itemized add-on consent, junk-fee ban, 2-year recordkeeping.
- When: Effective October 1, 2026.
- Who: Every licensed California retail motor vehicle dealer — new, used, and motorcycle.
- Bond: This does NOT change the bond. $50K / $10K tiers and OL 25 form are unchanged.
- Risk: Civil penalties and possible license revocation. BAR + CA DMV enforce.
Background: What SB 766 Is and Why California Passed It
SB 766 — formally the Combating Auto Retail Scams (CARS) Act of California — is California's 2025 consumer-protection statute targeting deceptive auto-retail practices. It was signed into law by Governor Newsom and is scheduled to begin enforcement on October 1, 2026. The bill grew out of years of complaints to the Bureau of Automotive Repair, the California DMV, and the Attorney General about hidden fees, surprise add-ons, and advertised prices that bore no relationship to what buyers actually paid.
SB 766 also runs in parallel with the federal FTC CARS Rule, which was struck down on procedural grounds by the 5th Circuit Court of Appeals in 2025. Rather than wait for federal re-promulgation, California adopted a state-level version with similar consumer protections. California can enforce SB 766 regardless of what happens to the federal rule.
The act is about how dealers advertise, disclose, and contract — not about who can hold a dealer license. The licensing framework, classification system, education requirements, and surety bond under the §11710 statutory framework all remain in place exactly as they were before SB 766, as verified by our NV-licensed surety producer.
Timeline: Signing to Enforcement
Dealers have a meaningful runway between the 2025 signing and the October 1, 2026 effective date. Here is how the runway breaks down — see also our biennial OL 45 renewal walkthrough to align CARS readiness with the next cycle.
2025: Signing
SB 766 passes the California Legislature and is signed into law by Governor Newsom. Effective date deferred to allow industry preparation.
Now – Sept 2026: Prep
Dealers update advertising, build add-on consent flows, install DMS updates, and train staff. BAR and CA DMV publish implementing guidance.
October 1, 2026: Live
Enforcement begins. All California retail dealer activity must comply with SB 766. Expect a grace-period educational posture from regulators through year-end.
What SB 766 Changes
Six concrete things change for California dealers on October 1, 2026 — including those operating in the San Diego & Otay Mesa cross-border market. Each one is a real workflow change, not just a paperwork tweak.
Pricing Transparency — The "Offering Price"
Dealers must clearly display the full out-the-door offering price — every dollar a buyer would actually pay minus only government taxes and government-imposed fees. The price must appear in advertisements and at the point of sale, and it cannot be conditioned on a trade-in, manufacturer rebate, or financing arrangement unless the same price is available to any buyer.
Junk Fee Prohibition
Add-on fees that do not provide a real, measurable benefit to the buyer are prohibited. So are deceptive descriptions of optional add-ons and any bait-and-switch tactic that swaps the advertised vehicle, price, or financing terms once the customer is in the dealership.
Add-On Product Disclosure & Consent
Every optional product — GAP, extended service contracts, paint protection, tire-and-wheel, theft etching, nitrogen fills, and the rest — must be itemized with its price and a plain-English explanation. The buyer must give affirmative, separate consent for each add-on, distinct from the main purchase contract.
Advertising Compliance
Every advertised price has to be a price an ordinary buyer could actually obtain without trade-in, financing, or eligibility tricks. "Down from" claims, conditional discounts, and fine-print disclaimers that swallow the headline are squarely targeted by SB 766.
Recordkeeping
Dealers must retain documentation of every required disclosure and every separate add-on consent for at least 2 years. Records must be producible on request by BAR or the California DMV during routine inspection or in response to a consumer complaint.
Enforcement & Penalties
The Bureau of Automotive Repair and the California DMV share enforcement authority. Civil penalties are available, and serious or repeat violations can support license suspension or revocation. Consumers may also have private remedies for deceptive pricing under California consumer-protection law.
What SB 766 Does NOT Change
This is the section every California dealer needs to read carefully. SB 766 reshapes the buyer-facing pricing and disclosure experience. It does NOT change the underlying licensing and bonding framework. In particular, this does NOT change the bond.
§11710 Surety Bond Amount
$50,000 for most new and used motor vehicle dealers; $10,000 for low-volume used dealers (25 or fewer retail sales annually). UNCHANGED by SB 766.
OL 25 Bond Form
The California DMV OL 25 bond form is unchanged. Existing bonds remain in force; renewals continue on the same form.
License Classes
New, used, motorcycle, wholesale, autobroker, and lessor-retailer classifications are unchanged.
Pre-Licensing Education
The required dealer pre-licensing class hours are unchanged, including the curriculum administered by the California DMV Occupational Licensing program.
Continuing Education (CE)
Annual CE requirements for renewing California dealer licenses are unchanged by SB 766.
Application & Renewal Process
The standard CA DMV dealer application packet, fees, and renewal schedule are unchanged. SB 766 layers on top of the existing licensing system rather than replacing any part of it.
Need to confirm your bond is still in good standing? The current product details and renewal mechanics live on the California motor vehicle dealer bond page, and the California dealer bond guide walks through every step of the bond process.
Federal Context: The FTC CARS Rule
The federal Combating Auto Retail Scams Rule was finalized by the Federal Trade Commission and then challenged in court. In 2025, the 5th Circuit Court of Appeals struck the rule down on procedural grounds — meaning the FTC may re-propose it in the future, but it is not currently enforceable nationally.
California did not wait. SB 766 is California's state-level adoption of very similar protections — honest out-the-door pricing, itemized add-on consent, a ban on junk fees, and recordkeeping requirements. The state has clear authority to enforce SB 766 even though the federal rule is in limbo.
The practical effect for California dealers: do not assume the federal court decision relieves you of any California obligation. SB 766 is independent of the FTC rule and takes effect on October 1, 2026 regardless.
Federal vs. California — Side by Side
Compliance Checklist: What to Do Before October 1, 2026
Ten concrete steps every California dealer should work through between now and the effective date — covering retail dealers across the San Jose dealer corridor and the Fresno Central Valley dealer market. None of these are optional — they map directly onto specific SB 766 obligations.
- 1Audit every current advertisement (website, social, TV, radio, third-party listings) to confirm the offering price is shown and matches reality.
- 2Map every optional add-on product your store sells. Confirm each one has a real, measurable buyer benefit and a plain-English description.
- 3Build or buy an itemized add-on consent form. Each line item must capture a separate affirmative buyer signature.
- 4Talk to your DMS vendor about the SB 766 update path and target install date.
- 5Update your buyer disclosure packet to include the offering-price summary at the front.
- 6Build a 2-year retention workflow for all SB 766 disclosures and consents — cloud or paper, but indexed and producible.
- 7Schedule a one-time SB 766 training session for sales, F&I, and management before October 1, 2026.
- 8Review pay plans to ensure F&I incentives do not reward conduct SB 766 prohibits.
- 9Designate a compliance owner — usually a GM, controller, or compliance officer — accountable for SB 766 readiness.
- 10Document everything: a written compliance file is the cheapest defense against an enforcement letter.
For a printable version with deadline columns and assigned-owner fields, see the CARS Act compliance checklist page.
Penalties for SB 766 Violations
SB 766 is enforceable through multiple channels — and violations can trigger claims against the California dealer bond under §11711. Penalties are real but proportional — single, isolated paperwork misses are handled differently than systematic deceptive-pricing practices.
Civil Penalties
BAR and the California DMV can assess civil penalties. The exact schedule will be published by the regulator ahead of October 1, 2026.
License Action
Serious or repeat violations can support license suspension or revocation under existing California Vehicle Code authority.
Private Remedies
Consumers may also pursue private remedies under California consumer-protection statutes for deceptive pricing or unauthorized add-ons.
DMS & Vendor Implications
Most California dealers will not build SB 766 compliance from scratch — their DMS, F&I menu provider, advertising vendor, and website CMS will each ship updates. Plan the integration now.
DMS Updates
CDK, Reynolds, DealerSocket, VinSolutions, Dealertrack, and others are releasing California-specific SB 766 modules to capture itemized add-on disclosure, separate consent signatures, and the 2-year retention requirement.
Advertising Vendors
Website CMS, third-party listing platforms (AutoTrader, Cars.com, CarGurus), and paid-media agencies need to surface the offering price prominently and remove any conditional-pricing language SB 766 prohibits.
F&I Menu Providers
Menu products (MaximTrak, F&I Express, Darwin, StoneEagle) need to support line-by-line add-on consent capture with separate signatures distinct from the main retail installment contract.
Training Vendors
Most California dealer associations and compliance training firms have SB 766 courses available. Budget for a one-time training session plus refreshers in ongoing sales meetings.
Internal Training: What Your Staff Needs to Know
SB 766 fails or succeeds at the desk. A perfectly configured DMS does not help if the salesperson, sales manager, or F&I manager does not understand the rules. Build a one-time training session before October 1, 2026 and refresh it in monthly sales meetings.
Sales Staff
How the offering price is calculated, what cannot be added on the back end, and how to talk about the price without violating the advertising rules.
F&I Managers
Itemized add-on presentation, separate consent capture, how to describe each product accurately, and how to document that the customer was offered, not pressured into, every add-on.
Management
Compliance ownership, recordkeeping audits, advertising approval workflow, and handling regulator inquiries when they arrive.
Related California Dealer Topics
SB 766 is one layer of California dealer regulation. These companion pages walk through the bond, the licensing process, and the broader framework SB 766 sits on top of.
CA §11710 Dealer Bond
The current $50K / $10K bond product — unchanged by SB 766. OL 25 form, A-rated surety, same-day issuance.
CA Dealer Bond Guide
Step-by-step walkthrough of the California dealer bond process, from quote to DMV filing.
Used Motor Vehicle Dealer
Specific requirements for California used-vehicle dealers, including the $10,000 low-volume bond tier.
CARS Act Compliance Checklist
Printable checklist with deadline columns and assigned-owner fields for pre-October 2026 readiness.
California CARS Act: Common Questions
Direct, fact-checked answers about SB 766, the effective date, and what dealers actually owe.
What is California SB 766 in plain English?
SB 766 is the Combating Auto Retail Scams (CARS) Act of California. It is a consumer-protection law signed by Governor Newsom in 2025 that requires California auto dealers to advertise honest out-the-door prices, itemize and separately obtain consent for every add-on product, ban add-on fees that provide no buyer benefit, and keep documentation of those disclosures. It does not change dealer licensing classes, pre-licensing education, or the §11710 surety bond.
When does the California CARS Act take effect?
SB 766 takes effect October 1, 2026. Dealers have a multi-month window between signing in 2025 and enforcement in October 2026 to update advertising, point-of-sale forms, dealer management system (DMS) workflows, and staff training. The Bureau of Automotive Repair (BAR) and California DMV are expected to issue grace-period guidance through the end of 2026.
Does SB 766 change the California §11710 dealer bond amount?
No. SB 766 does NOT change the California Vehicle Code §11710 dealer surety bond. The $50,000 bond for most new and used motor vehicle dealers and the $10,000 bond for smaller-volume used dealers (25 or fewer retail sales annually) remain unchanged. The OL 25 bond form is unchanged. Licensing classes, pre-licensing education, and continuing education requirements are also unchanged.
Who has to comply with SB 766?
Every licensed California motor vehicle dealer that sells vehicles at retail to consumers — new-car franchised dealers, independent used dealers, and motorcycle dealers. Wholesale-only dealers who never sell to retail consumers fall outside the consumer-facing pricing rules but should still review advertising and recordkeeping requirements. Out-of-state dealers advertising to California consumers can also be reached by SB 766 enforcement.
How is SB 766 different from the federal FTC CARS Rule?
The federal FTC Combating Auto Retail Scams Rule was struck down by the 5th Circuit Court of Appeals in 2025 on procedural grounds. California passed SB 766 as a state-level adoption of similar protections regardless of the federal outcome. The state can enforce SB 766 even though the federal rule is in limbo. The two rules cover similar ground — junk-fee bans, add-on consent, and honest pricing — but SB 766 is the binding rule for California dealers.
What are the penalties for violating SB 766?
Civil penalties are available to BAR and the California DMV, and serious or repeat violations can support license suspension or revocation. Consumers may also have private remedies under California consumer-protection law for deceptive pricing. The exact penalty schedule will be published by the regulator, but the law is designed to be enforceable through both administrative action and civil litigation.
Do I need to change my DMS or paperwork before October 1, 2026?
Yes. Most major DMS vendors (CDK, Reynolds, DealerSocket, VinSolutions, and others) are releasing California-specific updates for SB 766 to capture itemized add-on disclosures, separate consent capture, offering-price displays, and 2-year recordkeeping. Talk to your DMS account manager now. If you use paper forms, you will need new add-on consent forms and an updated buyer disclosure packet.
Does SB 766 require new staff training?
The law does not name a specific course, but compliance in practice requires that every sales manager, finance manager, and salesperson understand the new offering-price rules, the add-on consent process, and the advertising prohibitions. Most dealers will run a one-time training session before October 1, 2026 and refresh it during ongoing sales meetings.
What is an "offering price" under SB 766?
The offering price is the full out-the-door price a customer can actually purchase the vehicle for, excluding only government taxes and government-imposed fees. It includes the vehicle price, dealer-added accessories already on the unit, and any mandatory dealer fees. It cannot be reduced by a trade-in, manufacturer rebate, or financing tactic unless the same price is available to any buyer. Advertisements must display this price prominently.
Where can I read SB 766 itself?
The full text and legislative history are at the California Legislative Information site (leginfo.legislature.ca.gov). BAR and the California DMV will publish implementing guidance ahead of the October 1, 2026 effective date. We link both at the bottom of this page.
Official Sources for SB 766 & California Dealer Law
SB 766 Bill Text
California Legislative Information — full text and history
CA DMV — Vehicle Industry
Dealer licensing, OL 25 bond form, and implementing guidance
Bureau of Automotive Repair
Co-enforcement agency for SB 766 dealer pricing rules
FTC CARS Rule (Federal)
Federal sibling rule struck down in 2025 — for context only
All content is researched from official state and federal sources (.gov) and verified before publication. BuySuretyBonds.com works with Treasury-certified, A-minimum rated surety carriers serving all 50 states.
SB 766 Does Not Change Your Bond. Renewals Still Happen on Schedule.
The §11710 bond stays at $50,000 / $10,000. The OL 25 form is unchanged. We issue same-day on A-rated paper, DMV-ready for upload.