California’s New Car Buyer Protection Laws: Three-Day Cancellation Rights, Lemon Law Changes, and Dealer Accountability

Buying a car is a major financial decision, and discovering unexpected charges or mechanical problems shortly afterward can be extremely frustrating for individuals and their family members. California has introduced new consumer protections meant to make vehicle purchases more transparent and provide additional options when disputes arise. Understanding these laws can help consumers recognize potential problems, preserve important documents, and determine when legal guidance may be appropriate.

California's New Three-Day Used Car Cancellation Right

One of the most significant changes under the CARS Act, enacted through Senate Bill 766, is the right to cancel qualifying used vehicle purchases or leases within three calendar days.

Previously, California generally required dealers to offer an optional two-day cancellation agreement for certain used vehicles. The new law establishes a cancellation right without requiring consumers to purchase that option.

For qualifying transactions, individuals may cancel for any reason, even if the vehicle has no mechanical defects. However, several conditions may apply, including but not limited to the following. 

• The used vehicle's purchase or lease price must be $50,000 or less.
• The vehicle generally must not have been driven more than 400 miles after the agreement was signed.
• The vehicle must be returned within the applicable cancellation period and meet statutory condition requirements.
• The dealership may charge a permitted restocking fee.

The three-day period often begins the calendar day after the contract is signed. If the final day falls on a day the dealership is closed to the public, the deadline extends to the next day the dealership is open. Consumers should review their cancellation disclosure carefully and act as soon as possible if they want to return a qualifying vehicle.

How the CARS Act Addresses Deceptive Dealership Practices

Beyond cancellation rights, the CARS Act establishes additional requirements intended to reduce misleading vehicle sales practices. Dealerships must provide clearer pricing information and avoid material misrepresentations involving vehicle availability, financing, trade-ins, and optional products.

The CARS Act also addresses optional add-on products, including service contracts and other dealership offerings. Dealers must disclose that these products are optional and comply with restrictions involving products that provide no meaningful consumer benefit. These requirements are meant to give consumers a clearer understanding of what they are purchasing and how much they are agreeing to pay. Not every unexpected charge allows for a legal violation. The applicable contract, disclosures, and circumstances surrounding the transaction must be reviewed.

California Lemon Law Changes Under AB 1755 and SB 26

California's Lemon Law, primarily governed by the Song-Beverly Consumer Warranty Act, provides potential remedies when qualifying vehicles experience warranty-covered defects that cannot be repaired after a reasonable number of attempts.

AB 1755, signed in September 2024, and SB 26, signed in April 2025, introduced procedural changes intended to improve how certain manufacturer warranty disputes are handled. The new procedures do not apply identically to every manufacturer. California allows manufacturers to elect the procedures established under AB 1755 and SB 26, making it important to determine which rules apply to a specific claim.

New Pre-Suit Notices and Manufacturer Response Deadlines

Under the applicable new procedures, consumers seeking certain Lemon Law remedies may need to provide written notice to the manufacturer before filing a lawsuit.

For manufacturers participating in the new framework, a consumer seeking a repurchase or replacement must generally provide written notice at least 30 days before initiating litigation to satisfy the relevant statutory requirements. After receiving a qualifying demand, the manufacturer must follow specified response and resolution deadlines. These include offering restitution or replacement within 30 days and completing the applicable remedy within 60 days when statutory conditions are satisfied. The framework also establishes requirements involving acknowledgments, documentation, and the handling of agreed settlements. These deadlines are important because failing to follow applicable procedures may affect a consumer's available remedies or the progress of a legal claim. As a result, it may be important to speak to a legal professional moving forward. 

What Should Consumers Do After Discovering a Problem?

After discovering an issue, consumers should consider taking the following steps. 

• Preserving purchase agreements
• Financing disclosures, advertisements, warranty documents, and communications with the dealership or manufacturer

For mechanical problems, repair orders should determine the reported defect, the dealership's findings, the repairs performed, and the dates the vehicle was unavailable.

The Importance of Speaking to A Legal Professional

Individuals should speak to a legal professional to understand whether their vehicle qualifies under California lemon laws. Understanding the three-day cancellation rights, lemon law changes, and dealer accountability are important factors to maintain your overall safety on the road. Legal guidance and support may help individuals and their loved ones become aware of these protection laws moving forward. 

How KAASS LAW Can Help

The qualified personal injury attorneys at KAASS LAW want to help individuals understand new laws and regulations to ensure the safety of themselves and others on the road. Our legal team may review the facts surrounding your case and make sure you understand your rights throughout the claims process. Don't wait; call KAASS LAW today for a confidential consultation