California Gives Used-Car Buyers Three Days to Cancel, Starting Oct. 1

The right covers used vehicles priced at $50,000 or less, dies at 400 miles, and carries a restocking fee up to $600.

You're wondering whether you can hand back a used car you already signed for. In California, as of Oct. 1, you can. Three calendar days, any reason, and no explanation owed to the dealer. The right comes from the California Combating Auto Retail Scams Act, the law state Senator Ben Allen of Santa Monica carried as SB 766, and its own operative clause, Civil Code section 1784.28, is what held the whole thing back for nearly a year.

Governor Gavin Newsom signed it on Oct. 6, 2025, as Chapter 354 of that year's statutes. What it replaces is the reason so many Angelenos believe California has no cooling-off period at all. Until Sept. 30, state law required a dealer to offer you a two-day cancellation option on a used car under $40,000 — and to charge you for it. Vehicle Code section 11713.21 set the price: $75 on a car with a cash price of $5,000 or less, $150 up to $10,000, $250 up to $30,000, and one percent of the purchase price above that. You bought the right to change your mind, and if you didn't buy it you didn't have it. On Oct. 1 that section was repealed and the three days came free.

Free isn't the same as unconditional, and the conditions are where this will go wrong for people. We read the operative title — Civil Code Title 1.5B, added by section 1 of the bill, ten sections in all — and below is what it actually requires, in the order you'd need it.

Step 1: Check that the car qualifies

The three-day right attaches to a used vehicle bought or leased at retail from a licensed California dealer at a price of $50,000 or less. That's the top-line test, in section 1784.43(a)(1)(A), and subdivision (g) repeats the ceiling in a sentence of its own.

New cars are out; the cancellation right is written for used vehicles only. Motorcycles are out by name — the law's definition of "used motor vehicle" excludes them. So are private-party sales, since the duty falls on dealers, along with wholesale sales, auction sales, fleet transactions of more than one vehicle for business use, buyers who take five or more vehicles a year from the same dealer, vehicles that don't have to be registered, and anything with a gross vehicle weight rating of 10,000 pounds or more.

One exclusion catches a transaction that happens in a lot of Los Angeles driveways. If you're leasing a car and you buy it out at the end, section 1784.43(h) says the right doesn't apply, because you already had the vehicle before the sale.

Step 2: Count the three days from the day after you sign

The statute defines "three-day" as the three calendar day period commencing the calendar day after the purchase or lease is executed. Sign on a Saturday and your days are Sunday, Monday and Tuesday. The day you sign isn't one of them.

Calendar days, not business days, and the difference is a weekend. The DMV's own CARS Act page puts it plainly: a "three-day (including weekends) cancellation right for any reason."

There's one extension and it's narrow. If the third day lands on a day the dealership is closed to the public, the period runs to the next day it's open. Otherwise the right ends at the close of business on the last day — not at midnight, and not whenever you can get off work and across town.

Step 3: Watch two odometer numbers, 400 and 250

Drive more than 400 miles between signing the agreement and the moment you try to cancel, and the right is gone. The statute writes no exception into that number.

The second number costs money rather than the right itself. Past 250 miles, the dealer may add a dollar for every mile over, capped at $150. So the odometer is doing two jobs during those three days, and the cheaper line is the one you're likelier to cross without noticing.

Step 4: Know what walking away costs

The right itself is free, and the statute makes the dealer say so: the required disclosure has to state that although it can't charge you for the right to cancel, it may charge a restocking fee. That fee has a fixed formula — 1.5 percent of the sale price, never less than $200 and never more than $600.

Run it. On a $20,000 car, 1.5 percent is $300, and $300 is what you pay. On a $12,000 car the math gives $180, so the $200 floor applies instead. On a $45,000 car the math gives $675, so the $600 ceiling applies. Add up to $150 in mileage and the worst case is $750.

There's an alternative the fine print allows. If the dealer charged you a shipping fee to transport the car, it may keep what shipping actually cost instead of the percentage — but not more than the percentage would have permitted, and it has to refund you the difference between what it charged and what it kept.

The fee comes out of your refund if there's a refund to take it from. If the refund doesn't cover it, the balance is due at the counter when you cancel. One small mercy rides along in the tax code: the Legislature amended Revenue and Taxation Code section 6012.3 so that restocking fees under this section aren't part of the gross receipts a dealer owes sales tax on.

Step 5: Bring the car back in person, with everything

Canceling isn't an email. The statute requires the whole package personally delivered to the selling dealer, during business hours, by the buyer or lessee. That means the restocking fee, unless it's being deducted from a refund; any other cash or items you received in connection with the sale; and the vehicle itself, free of liens other than the one the sale created, in the same condition it left in.

"Same condition" has give in it, and the give is written down: reasonable wear and tear is excepted, and so is any defect or mechanical problem that showed up after delivery and wasn't caused by you. If a dealer wants to claim damage beyond reasonable wear and tear, it has to keep documentation describing that damage, and claiming it without reasonable basis is itself a violation of the title.

Step 6: Sort out the trade-in

Cancel, and the dealer has to hand back your trade-in and any keys you gave it. Unless it has already sold the car or started the title transfer — which, on a busy lot, can happen inside three days.

In that case the dealer owes you the greater of three numbers: the value you agreed on in the sales or lease agreement, the amount it actually sold the trade-in for, or fair market value. Outstanding debt secured by the trade-in comes off the top, and you're entitled to a receipt itemizing the basis for every deduction and stamped with the date and time you exercised the right.

Fair market value isn't left to argument. The dealer gets a rebuttable presumption if it uses one of two tests: a written offer to purchase the trade-in that you received, that the dealer honors, and that stays valid at least seven days; or the vehicle's trade-in valuation in a nationally recognized pricing guide the dealer selects, judged on the car's condition when you traded it. And if the dealer tells you it sold your trade-in, it has to show you the document that proves it, with the buyer's personal information redacted.

Step 7: Hold the dealer to 48 hours

No later than 48 hours after you exercise the right, the dealer has to cancel the contract and refund you, minus what the statute lets it keep. Delays it doesn't control — a bank's processing, a card issuer's — aren't charged to it. If you paid by a method that doesn't clear immediately, like a check, it can wait until two business days after your payment is verified, and it has to give you documentation showing when that happened.

The statute then lists eight things a dealer may not do once you've canceled. It may not impede you from exercising the right, overcharge the restocking fee, withhold your down payment or trade-in, fail to refund on time, fail to pay what it owes for a sold trade-in, or refuse you the receipt for that sale. A seventh covers claiming damage beyond reasonable wear and tear without a reasonable basis. The eighth is the most specific of the eight, and the most useful to know before you're standing at a counter hearing it: a dealer may not claim that the person authorized to return your down payment or trade-in isn't available.

Three documents carry the right, and you should see all three

A separate disclosure titled "3-Day Right to Cancel Used Car Purchase or Lease." It has to be its own document rather than a clause inside the contract, and it has to spell out the deadline, the 400-mile limit, how both components of the restocking fee are calculated, and what happens to your trade-in. If the deal was negotiated primarily in one of the languages named in Civil Code section 1632 — Spanish, Chinese, Tagalog, Vietnamese or Korean — the disclosure has to be provided in that language too.

A block on page one of the contract, in the statute's own capitals: "CALIFORNIA DOES NOT HAVE A COOLING-OFF PERIOD FOR NEW VEHICLES. HOWEVER, IF YOU PURCHASED OR LEASED A USED VEHICLE FOR $50,000 OR LESS, YOU HAVE 3 DAYS TO CANCEL THIS CONTRACT FOR ANY REASON."

A sign on the wall, in at least 36-point type, in every sales office, every sales cubicle where terms get discussed, and every room where contracts are signed. The notice it replaces has hung in California showrooms since long before this bill and opened with the opposite sentence — "THERE IS NO COOLING-OFF PERIOD UNLESS YOU OBTAIN A CONTRACT CANCELLATION OPTION." That older section was repealed on Oct. 1. Where the dealership also sells motorcycles or off-highway vehicles, the new sign has to carry a second line saying the period doesn't apply to those.

What else changed the same morning

The return right is one section of a ten-section law, and the rest of it changes how a car is advertised and sold to you long before you sign anything.

Total price. Any advertisement referencing a specific vehicle, any advertisement quoting a monetary amount or financing term for one, and the dealer's first written response to you about a specific car all have to disclose that vehicle's total price. Total price means the sale price including dealer price adjustments and anything installed at the time of the ad, excluding government taxes and fees — and with no rebate deducted to shrink the number. The dealer has to keep that communication for at least two years and give you a copy if you ask in writing.

Monthly payments. Put a monthly payment in writing and the dealer also has to put in writing the total you'll have paid after every scheduled payment, plus the down payment or trade-in value that total assumes. If it compares payment options and leans on the lower monthly figure, it has to disclose that lower monthly payments often increase what you pay in the end.

Add-ons. Every written pitch for an add-on during the negotiation has to say at least once, clearly and in writing, that the add-on isn't required and you can buy the car without it. Seven charges are banned outright as things a buyer can't benefit from: nitrogen tire products under 95 percent nitrogen purity; products that provide no coverage for the vehicle, the consumer or the transaction; a non-compliant GAP agreement; a service contract already void for a preexisting condition such as crash or flood damage; oil changes for an electric vehicle; catalytic converter marking on a car that has no catalytic converter; and surface protection that voids the manufacturer's paint warranty. Allen's office named the EV oil change as one of the practices the bill was written to stop.

A payment deadline the buyer never sees. If you pay for an add-on, the dealer has to pay whoever actually provides it within 10 days of your signature, unless there's an agreement for later payment that doesn't touch your coverage. That is the clause aimed at the service contract you bought and the administrator who never heard of you.

Allen's office put the case for the package in one line — the bill would "codify best-in-class protections for California car buyers" — and cited an academic projection of $234 million a year in savings for California car buyers and 8.5 million hours of their time.

Two edges the statute leaves open

Recreational vehicles. The repealed two-day option excluded RVs by name. The new title's definitions don't mention them at all; what they exclude are motorcycles, unregistered vehicles, anything at 10,000 pounds GVWR or above, and the wholesale, fleet, auction and commercial categories. The showroom sign the law requires names motorcycles and off-highway vehicles, and stops there. If you're buying a used motorhome priced under $50,000, that silence is the thing to ask the dealer to put in writing.

The summaries round; the statute doesn't. The DMV's page describes "mileage limits (around 400 miles)" and "potential restocking fees ($200–$600)." Both are fair shorthand and neither is the number a dispute turns on. The statute says 400 miles exactly, and a fee of 1.5 percent bounded by $200 and $600, plus up to $150 more for miles past 250. Hold a dealer's arithmetic against the statute, not the summary.

If a dealer won't honor it

Start with the contract in your hand. California conditional sale contracts carry a boldface notice, kept in the version SB 766 writes, telling you that complaints about unfair or deceptive practices by the seller "may be referred to the city attorney, the district attorney, or an investigator for the Department of Motor Vehicles, or any combination thereof." Those are three separate doors and you can use more than one.

The DMV's door is its complaint page, which routes you to the Investigations Division and states that the department investigates alleged violations committed inside California only. Contract violations by a licensed dealer are on its own list of what that covers.

In Los Angeles County there's a closer one. The county's Department of Consumer and Business Affairs has run local consumer protection since 1975; its services include counseling on car sales, investigation of consumer fraud complaints, mediation with a business through trained neutral mediators, and small-claims advisors who help with filing, serving papers and collecting a judgment.

Two sentences in the statute are worth carrying into any of those rooms. Section 1784.22 says its remedies are in addition to any other remedies available under other law. Section 1784.21 says any waiver of the title by a consumer is contrary to public policy, unenforceable and void — so a signature line can't take the three days away from you.

If you're buying a used car, do one thing at the desk: ask for the separate disclosure by its title, "3-Day Right to Cancel Used Car Purchase or Lease," and read the deadline printed on it. That date is your clock, and the dealer is required to hand it to you before you drive off.