California’s CARS Act and the FTC’s vacated CARS Rule are not the same rules
Two things named CARS have been aimed at vehicle retail in the last three years. One is federal, and it is gone. The other is California’s, and it takes effect October 1, 2026. A surprising amount of the readiness material in circulation blends them, and the blend is not harmless — it produces requirements that do not exist and omits ones that do.
The federal rule is not in effect
The Federal Trade Commission finalized its CARS Rule in January 2024. The Fifth Circuit vacated it on January 27, 2025, on a petition brought by NADA and the Texas Automobile Dealers Association. The grounds were procedural: the FTC had not issued an Advance Notice of Proposed Rulemaking, which its own regulations required. The rule was never enforced. The Commission formally withdrew it on February 12, 2026, completing its removal.
So there is currently no federal CARS Rule to comply with, anywhere. A vendor still selling “CARS Rule compliance” as a national product is selling readiness for something that does not exist.
California’s statute is modeled on it, and differs materially
SB 766 borrows the federal rule’s architecture — price transparency, add-on controls, a misrepresentation list, recordkeeping — and diverges in the details that determine what a store actually has to do:
- The price term. The federal rule said “offering price.” California says total price, and defines it by reference to existing Vehicle Code advertising law. The two are not synonyms, and the exclusion lists differ.
- Add-on consent. The federal rule required “express, informed consent.” California has no such requirement — no per-add-on signature and no itemized consent form. What it has instead is a written optionality disclosure and a substantive benefit standard.
- Misrepresentations. Roughly sixteen federal categories; thirteen in California.
- “Clearly and conspicuously.” The federal rule defined it in detail. California did not carry a definition over. There is no statutory font size, placement or proximity standard.
- Cooling-off right. The federal rule had none. California has a three-day right to cancel on used vehicles at $50,000 or less.
- Add-on payment timing. Not a federal feature. California generally requires the third party providing the benefit to be paid within 10 days of signing.
- Enforcement. The federal rule was FTC-enforced with civil penalties. SB 766 designates no enforcement agency and states no penalty figure.
The four imports that cause real errors
In readiness material we have reviewed, the same four federal ideas keep turning up as California requirements. Each one is worth checking your own documentation for.
“Offering price”
Federal vocabulary. It appears nowhere in the California statute. A process document built around it is describing a calculation that has no legal referent here, and the substitution is not cosmetic: total price is defined by a specific list of exclusions, and using the federal concept quietly imports the wrong list.
“Express, informed consent” for every add-on
This is the costliest import, because it drives a form design. Stores acting on it build a signature line per add-on. California does not require that, and the official form stack confirms it — a single signature block over an itemized list. Building per-item consent is not a violation, but it is a materially slower F&I process bought for no compliance benefit.
A defined “clearly and conspicuously” standard
This one is dangerous in the other direction. Because the federal rule defined the phrase, some material presents type sizes and placement rules as California requirements. They are not. California uses the phrase without defining it, which is a live ambiguity rather than a safe harbor — meeting a federal formatting spec that no longer exists is not the same as being able to defend a disclosure as conspicuous.
Twenty-four months of recordkeeping
Both regimes land near two years, so this one rarely causes harm — but it is worth being precise, because the four-year figure that circulates in some checklists is not from either rule.
What California adds that no federal document will tell you
Two obligations have no federal analogue at all, and a store working from federal-derived material will simply not have them on the list: the three-day right to cancel on used vehicles at $50,000 or less, with its restocking fee, mileage limits and 48-hour refund; and the 10-day third-party payment rule for add-ons, which is an accounts-payable control rather than anything the sales floor would notice.
How exposure arises without an enforcement agency
The absence of a designated agency and a penalty figure reads, at first glance, like the statute has no teeth. That is not the right conclusion, and it is worth understanding before anyone budgets on it.
SB 766 creates no express private right of action. It does expressly provide that its remedies are cumulative and in addition to those available under other law, it voids consumer waivers as against public policy, and it directs liberal construction in favor of purchasers and lessees. Legislative analysis anticipated enforcement running through existing machinery rather than new machinery. In practice that points at California’s general consumer statutes, where a statutory violation is the more direct hook.
What that means operationally is unglamorous: the evidence you would want in that setting is the same evidence the recordkeeping section already requires you to keep. Provability is the whole defense, which is why we treat the retention architecture as the load-bearing part of readiness rather than the filing part.
Reading the advocacy
Commentary on SB 766 runs hard in both directions — a consumer law center has called it best-in-nation, and the state dealer association has called it poorly drafted. Both are advocacy positions rather than findings, and neither is a good basis for a process decision. The statute’s own text, and the forms the industry is actually implementing, are.
Where this sits in a readiness plan
If your readiness material predates January 2025, assume it is federal and re-derive it. The cheapest version of this work is an audit of what your existing documentation asserts, because the errors are concentrated in vocabulary and form design rather than spread evenly. Get in touch, or start with the readiness overview.
A note on scope
M@B Consulting advises on operations and process. We are not a law firm, and nothing here is legal advice or a legal interpretation of SB 766 or of federal law. For how either applies to your specific situation, work with your own counsel or your state association — and bring us in to build the process that makes their guidance operational.