Eight months after the FTC’s federal CARS Rule was vacated, California stepped in. SB 766 (the CARS Act) has cleared both chambers and heads to the Governor, with an effective date of October 1, 2026. It bans misrepresentations, requires clear, conspicuous disclosures (offering price, total cost, down payment, add-ons being voluntary), prohibits “valueless” add-ons, creates a 3-day right to cancel for used vehicles, and sets two-year record retention to prove compliance.
Some dealers will read this and try to “do the minimum.” That’s a mistake.
The New Reality: Prove It or Pay for It
Compliance has moved from “paper promises” to provable disclosures. Regulators and AGs aren’t just asking “Did you disclose?”—they’re asking “Show me when, how, and that the consumer consented.” California is first; other states and AGs will follow. The risk of shortcuts isn’t just penalties—it’s recontracts, chargebacks, lost F&I revenue, and operational drag.
Good News: Compliance Can Pay for Itself
With the right workflow, you don’t have to choose between compliance and growth. At SecureClose, we built a new ROI model that shows how standardizing disclosures and capturing Express Informed Consent (EIC) can lift revenue and reduce costs at the same time.
Where the ROI Comes From
- Fewer errors & re-contracts: Guided, standardized flows cut avoidable mistakes and second trips to the box.
- Faster time-to-fund: Clean, consistent packets and audit trails reduce lender stips and back-and-forth.
- Higher close on approved deals: Consumers proceed with confidence when add-ons are clearly optional and value is transparent.
- Chargeback & complaint reduction: Time-stamped proof (e-sign, audio/video/avatar, multilingual) turns “he said/she said” into evidence.
- Lower legal exposure: The best defense is a complete, searchable record of exactly what was disclosed and accepted.
A Simple (Conservative) Example
- Re-contracts drop from 10% → 2% of deliveries (saves rework hours + rescissions).
- F&I menu acceptance +0.2 products per deal (with proper optionality + value explanation).
- Funding delays cut by 1–2 days on average (less floorplan interest + faster cash).
- Chargebacks/complaints down 60% with verifiable consent and records.
Result: even after platform costs, most rooftops see net monthly gains—compliance pays for itself and then some.
What SB 766 Demands—and How to Operationalize It
The law (high level):
- Clear, conspicuous disclosures: offering price, total price, down payment, add-ons are voluntary
- No “valueless” add-ons
- 3-day right to cancel (used)
- 2-year retention proving compliance
- No misrepresentations on price, financing, availability, or add-ons
Your playbook (do this next):
- Map your disclosures from offering price → total price. Make them obvious, repeatable, auditable.
- Clean your add-on catalog: remove or reframe anything that could be read as “valueless.” Show value and optionality side-by-side.
- Stand up EIC: capture affirmative consent before F&I and again at signing.
- Build the 3-day cancel workflow: notices, intake, refunds, inventory process—end to end.
- Lock retention: keep the artifacts (docs, audio/video, timestamps, acceptance logs) for at least two years.
How SecureClose Fits
- EIC Flows – standardize disclosures and capture consent (in English or Spanish, with avatar explanations if needed).
- Add-On Governance – present add-ons as truly optional, with clear accept/decline and rationale logged.
- 3-Day Cancel Support – automated consumer notices and acknowledgment trail.
- Proof Layer – e-sign + audio/video/avatar + metadata + e-vault custody = a tamper-evident, lender-ready file.
- Retention by Design – store the evidence you’ll need for two years (or longer by policy).
Don’t Wait for 2026
This isn’t about surviving California—it’s about future-proofing your sales process before other states and AGs replicate the model. Dealers who lean in now will compete on speed, trust, and fundability, not just price.
If you want our side-by-side SB 766 checklist, the ROI calculator, or a quick readiness walkthrough, message me. We’ll show how to implement compliant disclosures, protect your store, and grow results at the same time.
Compliance is the floor. ROI is the ceiling. With the right system, you can have both.
