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California has moved to backfill at least some of the lost $7,500 federal electric vehicle tax credit that was killed last year by the President Donald Trump's administration and Congress. State leaders there said they have given out nearly 12,000 rebates for first time EV buyers in just two months.

California Gov. Gavin Newsom, a Democrat thought to be a likely 2028 presidential contender, said in an Oct. 16 news release "twelve thousand Californians bought their first electric car and said goodbye to the gas pump" since his state started offering $3,500 "MyFirstEV" instant rebate program for first-time EV buyers in August.

"This is what affordability and economic security look like," Newsom added.

Newsom's comments come as electric vehicles accounted for 6.4% of all U.S. new car sales in the third quarter of 2026, up from 5.8% in the second quarter, according to Cox Automotive. They also come comes as the price of gas in the U.S. averaged $4.29 on Monday Oct. 19, according to AAA. That's up from $3.03 one year ago on Oct. 19, 2025.

The average price of gas in California on Oct. 19 was $6.17, according to AAA, making EV potentially even more appealing to buyers there.

Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive, said in a statement that elevated gas prices this year have helped the U.S. EV market find its footing after President Donald Trump ended a popular $7,500 tax credit for EVs in September 2025 that had existed since the end of former President George W. Bush's administration.

“The third quarter was the highest EV sales volume in a year, and improvement through 2026 suggests the reset phase is largely behind us," she said. "High pump prices are likely helping as well.”

With that in mind, the USA TODAY Cars Team took a look at why California is stepping in to replace the lost federal EV tax credits and how drivers there can qualify for the instant savings.

Why is California stepping in to offer EV tax credits?

California is home to the largest percentage of car buyers who opt for electric cars.

According to the Alliance for Automotive Innovation, which lobbies in Washington for most major automakers, EVs and hybrid cars composed more than 21 percent of new light-duty vehicle registrations in California the second quarter of 2026, which is the most recent data the group has made publicly available. California was the only state above 20 percent market share in the second quarter of 2026.

Additionally, carmakers sold 262,649 EVs in the third quarter of 2026, according to Cox Automotive. That means vehicles sold with the help of California's 12,000 EV tax rebate alone accounted for 5% of the nation's total EV sales in the third quarter.

Carmakers have lamented the loss of the federal incentive for EVs, and several have slashed plans to build future electric models in light of the shift in the federal government's support for the technology.

California Air Resources Board Chairwoman Lauren Sanchez said in an exclusive interview with USA Today that her state is stepping up to offer EV tax credits because "the rest of the global market is moving toward" Zero Emission Vehicles, despite the backsliding in the level of federal support under Trump.

California's new EV discounts come from a $135 million pot of budgeted state money. Additional money for the EV rebate program will come from automaker-funded grants, California officials have said.

California's plan came nearly two years after Newsom's post-2024 election pledge to step in to offer electric vehicle tax credits to consumers if Trump ended the popular federal credit. Trump pushed legislation through Congress that ended the federal tax credit on Sept. 30, 2025.

Who qualifies for California's EV rebates?

California's EV rebates are limited to residents of the state who have never purchased an electric car before.

The rebates are available to car buyers at all income levels, but the new EVs have to cost less than $50,000, according to the law authorizing the rebates that was signed by Newsom. The price cap for used EVs will be $25,000, according to the law.

There's a big catch, though: The California law states that there will be no price limits on rebates offered for cars made by "California-headquartered zero-emission vehicle companies," which is a big boon to EV manufacturers like Rivian and Lucid. The largest U.S. electric vehicle maker, Tesla, was started in California, but the company moved its headquarters to Austin, Texas, in recent years.

How much do used EVs qualify for?

Under the California budget agreement, rebates are available for used EVs, but those buyers will only get $1,750.

Under the old federal tax credit, used EVs qualified for up to $4,000 in tax credits. The used EV tax credit was added for the first time in 2022 by former President Joe Biden's administration. Prior to that, only new EVs qualified for any tax credits at all.

Can you buy an EV in California from out of state and get the rebate?

California's EV rebates were limited to state residents, so no you can't buy a plug-in model there and drive home to another state unless you also have a Golden State address.

EV shoppers in other states might find solace in the fact that multiple states have often replicated California's auto emissions regulations, and some might decide to copy the state's plans to offer rebates to shoppers. According to the California Air Resources Board, 17 states have adopted at least part of California's clean car regulations in recent years.

EV supporters have praised California for stepping in to fill at least part of the breach. The American EV Jobs Alliance, which is an electric car advocacy group, said California's successful launch of its EV rebate program shows there is still demand for plug-in models. “Nearly 12,000 first-time buyers in ten weeks tell policymakers something important: plenty of families want an EV, and for many of them the upfront price is the biggest hurdle," Mike Murphy, CEO of the American EV Jobs Alliance, said in a statement.

Murphy said his group is planning to push as many states as possible to follow California's lead on reviving EV discounts for first-time buyers.

"Automakers invest where they see a growing market, and first-time buyers are the customers that market most needs," he said. "States looking for a cost-effective way to make EVs affordable should study what California built.”

Source: USAToday

More car shoppers are turning to AI tools such as ChatGPT and Gemini to research vehicles and dealerships. For independent used-car dealers, that adds another consideration to online visibility: whether shoppers can find accurate, useful information about the dealership when they ask AI for recommendations.

Cox Automotive’s 2026 AI in Auto Retail Tracker found that 63% of in-market shoppers will definitely or probably use AI during their next vehicle purchase. AI tools were cited as a vehicle research source by 36% of shoppers, nearly matching the 38% who cited using automotive-specific websites. Yet only 29% of dealers said they had started adapting to AI-powered search.

Other research points to changes in how consumers navigate the web. Toyota’s marketing chief has reported a roughly 20% decline in traffic to Toyota.com and other top-of-funnel sites, which he linked to changing search behavior. Separately, a Pew Research Center analysis of U.S. browsing activity found that users clicked a traditional Google search result in 8% of visits when an AI summary appeared, compared with 15% of visits without one. The Pew findings cover general web searches, not automotive shoppers specifically.

AI-generated answers can draw on dealership websites, business listings, reviews and other online information. Dealers cannot control which sources an AI tool uses or guarantee that their store will be recommended, but they can take practical steps to keep their online presence accurate and useful.

Check what shoppers see. Search for your dealership by name in ChatGPT, Gemini and Google’s AI search features. Try local queries such as “used car dealers in [your city]” and questions about the vehicles or financing options you offer. Check whether the information is accurate and whether important details are missing.

Keep business information current. Make sure your dealership’s name, address, phone number and hours are consistent across your website, Google Business Profile and other important listings. Update inventory promptly and ensure vehicle descriptions, pricing and availability reflect what is actually on the lot.

Answer common customer questions. Provide clear information about financing options, credit requirements, trade-ins, vehicle history, warranties and the buying process. For independent dealers offering in-house financing or working with specific lenders, explain the actual terms and eligibility requirements without promising approval or outcomes.

Measure results. Track website visits, calls, form submissions and other leads, and ask customers how they found the dealership. These measures will not identify every AI-assisted shopping journey, but they can help dealers evaluate changes in traffic and lead quality over time.

AI is adding another way for consumers to research vehicles and local businesses, but it does not eliminate the need for traditional search visibility. Accurate listings, useful website content, current inventory and a credible online reputation remain practical priorities. Dealers can review their AI search presence periodically while continuing to monitor inventory, customer feedback and website performance as changes occur.

ASN CRM Tip: Make Your Inventory Easier to Find

Today's shoppers are increasingly using AI-powered search tools to find vehicles that match their needs. A detailed vehicle description can help make your inventory more relevant to those searches. In the ASN Inventory/Edit tab, look for the Generate button on Line 58 (Internet Remarks) in the pop-up tab. With one click, ASN can generate a compelling vehicle description to help highlight its features and appeal to potential buyers. Don't overlook this time-saving feature when preparing your inventory for online exposure!

Source: NIADA

On October 26, 2026, Cox Automotive confirmed that it found and contained “suspicious activity” on VinSolutions, the customer relationship management (CRM) system that about 7,000 dealerships use to track leads, deals and customers. Cox said the activity “did not involve any encrypting malware,” did not stop dealers from using the system, and touched no other Cox product. It said a limited subset of VinSolutions dealers was affected, that outside cyber experts are working out what data was involved, and that it will notify affected parties directly.

Cox has not said how many dealers or customers are affected or what kind of information was taken.

What has been claimed, and what has not been confirmed

Three days before Cox’s statement, on Friday, October 23, a group calling itself the Scarlett Group listed VinSolutions on its leak site. It claims to hold customer records that include Social Security numbers, driver’s license numbers and credit applications. Cox has confirmed none of that. Ransomware.live, a site that logs these postings, describes the group as newly active and says its claims should be treated with caution until someone checks them.

Two security firms have published numbers. Hudson Rock, which tracks logins stolen by password-stealing malware on infected computers, linked about 214 VinSolutions user logins to the incident. A ParanoidLab snapshot suggested about 1,859 exposed passwords. Both figures count staff logins, not customers, and neither has been verified.

Why this is the dealership’s problem, not only Cox’s

The customer records in a CRM belong to the dealer. Federal and state breach laws put the duty to tell customers and regulators on the business that owns the data, and they put a separate, shorter duty on the vendor: tell the owner.

The FTC Safeguards Rule treats dealers as financial institutions, and “customer information” includes records kept “by or on behalf of” the store. If unencrypted information about 500 or more of your customers was taken, the store must report to the FTC as soon as possible and no later than 30 days after discovery (16 CFR 314.4(j)). The vendor is not required to, but may file it for you. (In fact, the FTC updated the breach reporting form after the CDK incident to allow for service providers to file an omnibus form on behalf of multiple financial institutions.)

Three details matter here:

• If someone got unauthorized access to unencrypted customer information, the rule presumes they took it, unless the store has reliable evidence that they did not or could not reasonably have.
• The 30 days run from the first day the store knows, and the rule counts what the store’s employees and agents know. Do not wait for Cox’s forensic report to start counting.
• The FTC has said it will put these reports in a public database.

In almost every state, a vendor that holds data it does not own must tell the owner of an incident that could involve a breach of customer data, often “immediately.” The owner then owes notice letters to customers, and in many states a filing with the attorney general. The deadlines differ by the state each customer lives in, so a store with customers in several states has several clocks.

Vendors often offer to send the letters and make the filings for the dealer. That can work, but the duty remains the dealer’s. If the letter is late or leaves something out, the store is the one that missed it. If Cox offers to send letters for you, read the sample before you agree. After the 700Credit breach in late 2025, the vendor’s sample letter did not name the dealerships, but most state laws put the duty on the dealership. A letter that does not name your store may not count as your notice. California also requires specific headings and content, so one national letter may not satisfy every state.

What to do this week

1. Ask Cox in writing whether your store is in the affected group, and keep the answer with its date. That date may start your state clocks.
2. If it is, ask exactly what was taken: which fields, how many customers, which states they live in, the date range, and whether the data was encrypted. Ask Cox whether records from old deals and past customers are in scope, not only current ones. Customer records often stay in a vendor’s system long after the deal closes, and those customers are owed letters too. The FTC form and every state letter need these answers.

What was taken decides what you owe. The FTC report covers any ‘customer information,’ and the FTC says that includes even a plain list of the names and addresses of people who financed or leased with you. State letters usually need more, such as a name together with a Social Security number, a driver’s license number, or a login that opens an online account. So depending on the fields, a store may owe the FTC report and no state letters, or state letters and no FTC report.

3. Ask whether Cox will send customer letters and regulator filings for your store, and get the answer in writing. Check Cox’s dates against your own deadlines; Cox’s timetable does not move yours.
4. Reset every VinSolutions password at your store and remove anyone who has left. Two-step login is not optional. The Safeguards Rule requires it for anyone who logs in to a system that holds customer information, VinSolutions included, unless your Qualified Individual approves an equally secure control in writing. When you reset passwords, also end any sessions that are still logged in. Both published counts are about staff logins, which points to stolen staff passwords as one possible way in.
5. Tell your Qualified Individual (the person who runs your Safeguards program) and open the incident under your written incident response plan. The Safeguards Rule requires that plan, and the plan must say how it will be reviewed and revised after a security event.
6. Call your cyber insurer before you hire a lawyer or a forensic firm. Check whether your policy sets a deadline for reporting an incident and pays only for the insurer’s approved lawyers and forensic firms. Then tell IT and your vendors in writing to stop auto-deleting VinSolutions user logs, email, phone recordings and BDC texts. These often delete themselves after 30 to 90 days.
7. Warn staff and customers about follow-on scams. A CRM holds names, phone numbers, email addresses, vehicles and deal history. Criminals use real details like these to make fake payoff, refund or recall messages sound genuine.
8. Pull your VinSolutions contract and find who pays for customer letters, call centers and credit monitoring, and what Cox promised about security. When you pull the contract, find the cap on how much Cox can owe you and check whether data breaches are carved out of that cap.

What dealers learned from CDK

The best-known attack on dealer software is the June 2024 ransomware attack on CDK Global. Two court results from that attack bear on what a store can recover.

In a suit brought by a dealer group’s insurer against CDK, the court threw out the negligence claims under Illinois’s economic loss rule, which bars suing in negligence for purely financial losses that come from a failed contract. Only the contract claim survived. In practice, what a store can get back from its vendor after a breach depends mostly on what the contract says.

The consumer class action against CDK, consolidated in federal court in Chicago, is still undecided. In March 2026 the judge let the plaintiffs gather evidence on whether the court has jurisdiction over CDK and put CDK’s request to dismiss the case on hold until that is done.

We will update this story when Cox says what data was involved and how many dealers are affected.

ASN CRM Tip: Know Where Your Customer Data Lives

Recent industry events are a good reminder that customer data security deserves attention. Dealers should understand where their CRM data is stored, who has access to it, and what safeguards are in place. ASN CRM is part of an integrated dealership software environment, designed to help dealers manage customer relationships while maintaining control of their dealership's core data. Take a moment to review your CRM access, user permissions, and available features to get the most out of your system.

Source: ComplyAuto

Many dealerships have cleaned up pricing advertising since the Federal Trade Commission’s warning to 97 auto retailers in March, but compliance experts say there are more regulatory hurdles ahead.

Sales

California dealers have received an increasing number of legal solicitations built around a simple message: your dealership could be sued, and you should pay for protection before it happens.

Recently, dealers have even received private solicitations offering ongoing legal representation based on a per-vehicle charge, with the promise of predictable legal costs if a claim later arises.

It is easy to understand why this approach gets a dealer's attention. Nobody wants an unexpected demand letter, arbitration, or lawsuit. Legal bills can be expensive, and even a dealer who believes a transaction was handled properly can find itself having to spend time and money defending that position.

But there is another way to look at the problem.

Don't build your business around the fear of being sued

No attorney program, insurance policy, software system, or monthly legal subscription can guarantee that a dealership will never receive a claim.

And paying someone after the fact to defend a transaction does not change what happened when the vehicle was sold.

The strongest position a dealer can have is a transaction that was handled properly from the beginning, with the required disclosures, documents, approvals, signatures, calculations and supporting records properly completed and preserved.

That means having good procedures and actually following them.

Your system should help you do things right

This is one of the reasons ASN has always emphasized using the system's guides, required fields, forms, disclosures, warnings and other built-in processes as part of the dealership's daily operating procedures.

The objective isn't simply to produce paperwork.

It is to help the dealership establish a consistent process:

• Use the appropriate forms and disclosures.
• Follow the system's transaction workflow.
• Make sure required information is entered completely and accurately.
• Review documents before the customer leaves.
• Obtain the required signatures and acknowledgments.
• Keep supporting documentation.
• Follow established procedures consistently, even when the dealership is busy.
• Train employees so the process does not depend on one person's memory.
• Use the system's available reports, history and documentation to help review transactions when questions arise.

When a dealership consistently follows good procedures, it has something much more valuable than a promise that someone will defend it later: a documented history of how the transaction was actually handled.

There is no substitute for good business practices

ASN cannot promise that a dealer will never be contacted by an attorney or receive a claim. No software company can honestly make that promise.

What ASN can do is continue providing tools and system guidance designed to help dealers conduct and document their business properly.

That distinction is important.

The goal should not be to prepare for a lawsuit by paying someone who says they understand how lawsuits against dealers work. The goal should be to operate the dealership in a way that reduces the opportunity for a legitimate complaint in the first place, and to have good documentation when questions do arise.

Don't let fear become another cost of doing business

Legal solicitations often focus on the uncertainty surrounding litigation: Which transaction will generate a complaint? How much will it cost? What if the dealer did everything right?

Those are legitimate concerns.

But the answer should not be to assume that every dealer needs another recurring expense simply because someone has identified a way to monetize that concern.

Dealers should first look at their own operation:

Are we following our procedures?
Are our employees using the tools available to them?
Are required disclosures and documents being completed?
Are transactions properly documented?
Can we reconstruct what happened if a customer raises a question months later?

If the answer to those questions is yes, the dealership has already taken the most important step toward protecting itself.

Good practices are your first line of defense.

Use your DMS.
Follow the guides.
Complete the required documentation.
Train your staff.
Review your processes.
Keep your records.

And when a legal question actually arises, obtain advice from qualified counsel who can evaluate your specific facts and circumstances.

Don't operate your dealership around the fear of who might sue you. Operate it around doing things right.

ASN Reminder: ASN provides software and system tools to help dealerships manage their day-to-day operations. System features are not a substitute for legal advice, dealership policies, employee training, or compliance responsibilities. Dealers should use the available system guides and features as part of their established business practices and consult qualified counsel regarding specific legal questions.

Key Takeaways: 

• New car prices reached $50,900 in spring 2026 — a 3.3% increase since December — widening the new-to-used price gap to $21,000 and driving buyers firmly into the used market.
• Used hybrid sales are up 34% year-to-date in 2026, with average list prices hitting an all-time high of $38,800 as fuel price volatility accelerates demand for fuel-efficient vehicles.
• The average U.S. light vehicle is approaching 13 years old, and rising import duties averaging $3,700 per vehicle are compounding affordability issues across the market.

Halfway through 2026, the U.S. automotive market appears to have found its “new normal” — the $50,000 car. Prices have reset, buyer behavior is adapting, and the used market is absorbing the pressure in ways that dealers can no longer ignore.

Why Have New Car Prices Climbed Above $50,000 in 2026?

This spring, the average new car list price reached $50,900, up 3.3% since December, according to the CarGurus Mid-Year Intelligence Report. Used car prices crossed $30,000 at the same time — levels not seen since the supply disruptions and chip shortages of 2021.

New vehicle sales have not kept pace with population growth. The U.S. sold 17.3 million new vehicles in 2000 and only 16.3 million in 2025 — a decline of nearly 5 million units annually when adjusted for population. Manufacturers have responded by prioritizing profit, concentrating inventory at higher price points. Today, new inventory priced above $50,000 exceeds that priced below $35,000. It has been that way for a few years now.

The gap between new and used average list prices has widened from $13,000 in 2015 to $21,000 in 2026. New monthly payments now run roughly $180 per month above used, and nearly a third of new inventory carries an estimated payment above $1,000 per month.

What Do Aging U.S. Vehicles Mean for Used Car Buyers and Dealers?

The U.S. light vehicle fleet is now approaching an average age of 13 years — up four years since 2000 — with 289 million vehicles in operation, according to S&P Global Mobility data and CarGurus. Buyers who cannot afford new are holding on longer or moving further down the price ladder.

The share of used sales from 7- to 10-year-old vehicles is up from 17% in 2020 to 23% in mid-2026. Sales of vehicles with 60,000 to 150,000 miles are up 16% from 2020. The most in-demand high-mileage models, Ford F-150, Chevrolet Silverado 1500 and RAM 1500, are all averaging around $20,000 even with more than 120,000 miles.

Why Are Used Hybrid and EV Sales Rising So Fast in 2026?

Ongoing instability in global oil supply has kept gas prices elevated through much of 2026, and consumers have responded. Used hybrid sales are up 34% year-to-date. Average list prices was at an all-time high of $38,800 in mid-June — an 8.5% increase from early March, per CarGurus. Top-performing models include the Toyota Camry (up 306% in sales), Honda CR-V Hybrid (up 78%) and Jeep Wrangler 4xe (up 68%).

Used EV sales are growing too, concentrated around affordability. The top-selling models — Hyundai Ioniq 5, Chevrolet Equinox EV and Tesla Model Y — are priced between $25,000 and $31,000. A wave of off-lease EVs is expected to enter the market in the second half of the year, a likely supply boost that dealers should prepare for now.

How Are Import Tariffs Reshaping Automotive Pricing in 2026?

Import duties have risen sharply. The average duty on an imported vehicle jumped from roughly $360 in 2024 to approximately $3,700 in 2026. The impact is about $3,100 from South Korea and Mexico, $6,700 from the EU, and a whopping $13,200 from China.

What Should Car Buyers and Dealers Expect in the Second Half of 2026?

The remainder of 2026 depends on some key variables. CarGurus identified a few of them in their report.

First, gas prices drove powertrain demand through the first half of the year; where they go next will determine whether hybrid and EV momentum holds. Rising inflation concerns are also shifting Federal Reserve discussions from rate cuts to potential hikes, which would add greater strain to consumer affordability.

Consumer sentiment sits near record lows — yet vehicle sales have held relatively steady. In some places vehicles are still flying off the lots. But for how much longer can those numbers last? When will how everyone feels about the current price of a new vehicle be represented by the actual sales of new vehicles?

How long that gap persists is the central question facing dealers as they head into the back half of the year.

Souce: Digitaldealer

The Federal Trade Commission issued a consumer alert on Tuesday related to fraudulent online dealership listings, which Point Predictive chief fraud strategist Frank McKenna described in vivid detail more than a year ago.

The FTC described a similar strategy that McKenna mentioned, with officials saying in their alert, “Scammers set up bogus car dealership websites to trick you into paying up front for a car you’ll never lay hands on.

“They clone a real auto dealer’s website — often using AI to do so — copying the brand logos, vehicle listings, and photos down to the last detail. Some websites even include fake customer testimonials,” the FTC continued.

In this industry commentary about these phantom dealerships, McKenna explained how fraudsters use details from well-known dealership service providers to dupe consumers.

“The scam starts when criminals create a website or social media profile claiming to be a legitimate dealership. After they make the website, they steal legitimate listings from other dealerships or create new ones using stock photos,” McKenna wrote.

“Sometimes, those vehicle listings are scraped from legitimate platforms like Carfax and Autotrader, with prices set deliberately below market value — typically 10-30% lower to create urgency while remaining believable,” he continued.

“To make the scam more believable, the fraudsters will add false verification elements like fake Trustpilot ratings and fabricated customer reviews. Those reviews make the website even more authentic and are often undetectable to the human eye,” McKenna added.

And now the money part comes into play.

“Once an interested buyer is on the hook, scammers will employ high-pressure tactics, claiming other buyers are interested and pushing for wire transfers or cryptocurrency payments,” McKenna wrote.

“Once payment is received, however, all contact is severed, and the websites often vanish within days,” he went on to say.

With so much of the car business happening online nowadays, the FTC suggested that consumers take an old-school, in-person approach.

“Keep in mind that if the scammers are impersonating a real dealership, you might find glowing reviews. So go the extra mile — ask to see the car, and the dealership, in person. If they won’t let you, pump the brakes,” the FTC said in its alert.

“If the car is too far for you to visit in person, tell the dealer you want to hire a mobile inspection service to check out the car. If they won’t let you, consider taking your business somewhere else,” the FTC went on to say.

Souce: Auto Remarketing 

Independent dealers now have a clearer roadmap for pricing compliance, courtesy of the Federal Trade Commission (FTC). On September 15, the FTC published a new set of frequently asked questions aimed at helping dealers align their advertising practices with the agency’s price transparency expectations.

The FAQs reinforce a core standard: the advertised price of a vehicle must be the actual price a consumer can pay to purchase it, excluding only charges the government requires. That means any dealer-imposed fees, including documentation charges, need to be built into the advertised price rather than added later or disclosed separately.

Beyond that headline rule, the guidance covers how to handle rebates and discounts in ads, negotiating optional add-ons, keeping pricing consistent across print, digital, and in-person communication, and advertising vehicles still in transit to the lot.

The FAQs follow the FTC’s March 2026 warning letters to 97 dealership groups over pricing and advertising practices, signaling that transparency remains a top enforcement priority. The agency continues to pursue litigation against dealers accused of misleading pricing and accepts consumer complaints at ReportFraud.ftc.gov.

Dealers are encouraged to review current advertising and listing practices against the new FAQs to help ensure full compliance.

Souce: NIADA

Sales

California dealers should be preparing now for significant changes coming October 1, 2026, when Senate Bill 766, commonly known as the California Combating Auto Retail Scams (CARS) Act, takes effect.

The new law introduces important requirements affecting the sale and lease of vehicles, including a new three-day cancellation right for qualifying used-vehicle transactions, new pricing and advertising requirements, additional rules concerning optional products, and increased recordkeeping responsibilities.

A New Three-Day Right to Cancel

One of the most significant changes is the new three-day right to cancel certain used-vehicle purchases and leases.

For qualifying used vehicles sold or leased for $50,000 or less, the customer will have a statutory right to cancel the transaction within the applicable three-day period. Unlike California's current optional cancellation program, the dealer cannot charge the customer for the right to cancel.

However, the law permits the dealer to charge a statutory restocking fee when the customer exercises the right to cancel.

The restocking fee is generally:

• 1.5% of the vehicle sale price

• Minimum of $200

• Maximum of $600

• Plus, when applicable, $1 for each mile driven over 250 miles, up to an additional $150

The cancellation right also has a 400-mile limitation, making accurate mileage documentation at delivery and return particularly important.

Dealers Must Provide the Required Notice

The CARS Act requires dealers to provide customers with specific information concerning their cancellation rights. The purchase or lease agreement must also contain the required CARS Act notice.

Dealers should not think of this simply as adding another form to the deal jacket. The new requirements affect the overall transaction workflow, including sales, contracting, customer communications, F&I, and accounting.

Advertising and Pricing Requirements

The CARS Act establishes new requirements concerning the total price communicated to consumers.

Dealers should review how prices are presented across all channels, including:

• Dealer websites

• Third-party inventory websites

• Online advertisements

• Email

• Text messages

• CRM communications

• Sales worksheets

• Payment presentations

A dealer's first written communication with a consumer concerning a specific vehicle can also trigger disclosure requirements. Dealers should therefore review their CRM templates and automated responses before October 1.

Optional Products and Add-Ons

The new law also places additional emphasis on optional products and add-ons.

Products should not be presented as required when they are optional, and dealers should take care to ensure that products being sold actually provide a benefit to the customer and are appropriate for the vehicle and transaction.

This means dealerships should review their F&I menus, product offerings and sales practices before the law becomes effective.

Cancellation Requires Good Recordkeeping

When a customer exercises the right to cancel, the dealer will need to document the transaction carefully.

Records may include:

• Date and time the customer exercises the cancellation right

• Vehicle mileage at delivery

• Vehicle mileage at return

• Condition of the returned vehicle

• Restocking fee calculation

• Refund calculation

• Trade-in status

• Proof of refund

• Required cancellation documentation

The law also establishes record-retention requirements, making a complete electronic audit trail increasingly important.

What Does This Mean for ASN Dealers?

ASN Software is reviewing the CARS Act requirements and incorporating the necessary changes into the dealership workflow.

Our goal is to make compliance as straightforward as possible—not simply provide another form for dealers to remember.

For qualifying transactions, ASN can help dealers identify the applicable cancellation requirement, track the cancellation period and mileage, calculate the applicable restocking fee, produce required documentation, and maintain the transaction history.

ASN is also reviewing related areas including Inventory, CRM, Sales, F&I, Contracting, eSign and Accounting to help dealers manage the new requirements.

Dealers Should Prepare Now

Before October 1, dealers should:

1. Review their current cancellation procedures.

2. Review advertising and website pricing practices.

3. Review CRM email and text templates.

4. Review F&I products and optional add-ons.

5. Confirm that updated CARS Act forms and disclosures are available.

6. Train sales, F&I and accounting personnel.

7. Test their DMS workflow before October 1.

The CARS Act represents a meaningful change to California vehicle sales practices. Preparing early will give dealerships time to update procedures, train employees, and make sure their systems are ready.

ASN Software will continue monitoring the implementation of SB 766 and will provide additional information and system updates as the October 1, 2026 effective date approaches.

This article is intended as a general overview of the California CARS Act and is not legal advice. Dealers should consult their legal or compliance professionals regarding how the law applies to their specific transactions and business practices.

Criminals don’t rely on fake pay stubs or forged signatures when they walk into your dealership anymore. 

They’re using synthetic identities. They’re generating STIPS with AI. They’re recruiting straw buyers, creating fake employers, and stacking loans. 

Modern-day fraudsters are sophisticated, organized, and harder to spot. The fraud you thought you knew is gone. So are more than 80,000 dealership vehicles every year.

I was talking with a close friend last week. We’ve both been in the car business for over 20 years. He owns a multi-rooftop group in California, and I run a software company in the auto industry. 

His biggest concern isn’t inventory, fixed ops, or costs. He’s more worried about fraud right now, and he’s got company.

Experian says nearly nine in 10 dealerships consider fraud a significant concern.

Seven out of ten believe it’s getting worse.

Dealers report discovering an average of four fraudulent deals a year — many after the transaction has already been completed.

Nearly half lose $10,000 to $20,000 on a single deal.

Almost a third lose even more.

What’s worse is that 60% of auto lenders now mandate dealerships to buy back fraudulent loans, shifting the loss back to the retailer.

What are dealers up against? 

Here are just a few of the tactics fraudsters are using now.

• “Synthetic identities,” which are completely fake borrowers with legitimate-looking credit histories.  
• AI-generated documents — like bank statements and driver’s licenses — that are so convincing, they fool a well-trained eye.  
• Straw buyers, or a person with legitimate credit financing vehicles for someone else who doesn’t qualify. 
• Bust-out fraud, where criminals spend months building excellent credit, then finance multiple vehicles before fading into oblivion. 
• Fake employers, where businesses are fabricated simply to verify employment when lenders call.  

Once thieves take possession, they make cars disappear — or make money from them — ASAP.  Some are exported overseas, others are title-washed or given new VINs, rented out, or sold for parts before lenders or law enforcement realize what happened.

The dealer immediately asks, “Who missed this?” And it’s a valid question. “Was it sales? F&I? The lender? Transport? Titling?”

It isn’t just a new car problem, because criminals aren’t after transportation. They’re after assets they can turn into fast cash, and used cars are often just as profitable, if not more. 

And it isn’t just an F&I problem.

I believe it’s a process problem.

Your dealership might have a great CRM, credit platform, identity verification tool, or compliance solution. None of these, individually, are the problem. The problem is what happens between them.

Think about the average car deal today.

The customer’s information gets entered into one system, then re-entered into another. Supporting documents get uploaded here and downloaded there. The lender asks for more information. Someone else uploads those additional details somewhere else.

Each step seems innocent, but collectively, they create exposure. That’s because everyone is looking at one piece of the car sales transaction, but nobody is looking at the entire picture anymore. And that’s when patterns disappear.

Professional fraudsters don’t exploit your software systems. They exploit the gaps that exist between your systems. In other words, they don’t need your process to fail. They just need it to bend.

Here are three things you can do today to mitigate fraud.

1. Verify identity before you verify anything else.

If you can’t confidently establish who’s standing in front of you — or sitting behind the screen — nothing else in the deal matters. 

Everything downstream depends on getting this first step right.

2. Close the gaps.

Every additional platform, login, transfer, upload, download, and re-enter creates another opportunity for something to be missed. 

Your goal isn’t to find a single magical fraud solution. It’s about fixing the gaps in your process so fraud can’t hide.

3. Make every deal follow the same process, every time.

Fraudsters love exceptions — like busy Saturdays, a customer everyone likes and “trusts,” a rushed delivery, or a deal ready to close (that everyone pushes through) because it’s 9:00pm and your store is ready to close, too.

The strongest and safest dealerships rely on one consistent process for every customer and every deal, every time. 

Here’s how I see it.

The car deal tells a story.

Who is this customer? Where do they work? How do they earn a living? Does their income match their lifestyle? Does the documentation support the application?

Does their story make sense?

When that story gets scattered across seven or eight different systems, it’s much harder to notice when a chapter doesn’t fit.

Criminals have evolved and your process needs to evolve, too. The dealerships that win this battle aren’t the ones with the most software. They’re the ones with the strongest process.

Source: Autoremarkting

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