Official Publication of the California New Car Dealers Association Creating Clarity for California Dealers PAGE 6 Dealer Day 2026 Recap PAGE 16 The Unlicensed Driver Dilemma Legal Risks and Best Practices for California Dealers PAGE 23 2026 ISSUE 2
BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations FERRUZZO.COM | CALIFORNIA | TEXAS Business Transactions • Buy-Sell Agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations Employment Practices • Arbitration agreements • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Employee handbooks and compliance Estate Planning • Succession planning for business continuation • Family estate planning (wills and trusts) Tax • Property tax planning, audits and appeals • EDD audits Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisitions and lease agreements • Lender opinion letters An Automotive Industry Authority For over 40 years, Ferruzzo & Ferruzzo, LLP has been a leading authority in the Automotive Industry. Our team of auto-focused attorneys provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. Solving Your Challenges, Together
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® James Diedrich, james.a.diedrich@bofa.com Eugene Gonzalez, eugene.gonzalez2@bofa.com Steve Hood, steve.hood@bofa.com Liane Low-Bevett, liane.low-bevett@bofa.com Crystal Moreno, crystal.e.moreno@bofa.com business.bofa.com/dealer ©2026 Bank of America Corporation. All rights reserved. 6942528 01-26-2489 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA. Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® James Diedrich, james.a.diedrich@bofa.com Eugene Gonzalez, eugene.gonzalez2@bofa.com Steve Hood, steve.hood@bofa.com Liane Low-Bevett, liane.low-bevett@bofa.com Crystal Moreno, crystal.e.moreno@bofa.com business.bofa.com/dealer ©2026 Bank of America Corporation. All rights reserved. 6942528 01-26-2489 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
6 PRESIDENT’S MESSAGE Creating Clarity for California Dealers By Brian Maas, President, CNCDA 8 2026 Officers and Directors 10 From Statute to Strategy Helping Dealers Navigate the CARS Act 11 Disparate Treatment by Manufacturers in Warranty Parts & Labor Rate Increase Evaluations A Multi-Case Review By Joe Jankowski, Managing Member, Armatus Dealer Uplift 14 Under the Hood Getting to Know Your CNCDA Staff 16 Dealer Day 2026 Recap 23 MANNING LEAVER LEGAL LANE The Unlicensed Driver Dilemma Legal Risks and Best Practices for California Dealers By Timothy D. Robinett, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 26 CNCDA 2026 Sponsors 28 California Auto Outlook Covering First Quarter 2026 ©2026 The California New Car Dealers Association (CNCDA) | MBR Connect™, formerly The newsLINK Group LLC. All rights reserved. California New Car Dealer Quarterly is published four times per year and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of CNCDA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. California New Car Dealer Quarterly is a collective work, and as such, some articles are submitted by authors who are independent of CNCDA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (801) 676-9722. 16 Contents 2026 ISSUE 2 1517 L St. Sacramento, CA 95814 www.cncda.org (916) 441-2599 2026 CNCDA Leadership & Staff Brian Maas President bmaas@cncda.org Michael Walsh, MBA Chief Financial Officer mwalsh@cncda.org Anthony Bento Chief Legal Officer abento@cncda.org Crystal Bolaños Director of Education & Events cbolanos@cncda.org Autumn Heacox Director of Communications & Marketing aheacox@cncda.org Cathy Mason Director of Operations cmason@cncda.org Rebecca Matulich Director of Strategic Partnerships rmatulich@cncda.org Kenton Stanhope Director of Government Affairs kstanhope@cncda.org Les Swizer Legal & Regulatory Affairs Counsel lswizer@cncda.org Andrea Daugherty Political Engagement Manager adaugherty@cncda.org Lauren Johnston Membership & Accounting Manager ljohnston@cncda.org Liza Hernandez Staff Accountant lhernandez@cncda.org Stacy Barawed Executive Assistant sbarawed@cncda.org McKenna Bediamol Administrative Coordinator mbediamol@cncda.org Kim McPhaul CNCDA Foundation President kmcphaul@cncda.org Lewis Keys CNCDA Foundation Program Manager lkeys@cncda.org Felicia Palombi CNCDA Foundation Fund Development Manager fpalombi@cncda.org Genesis Flores CNCDA Foundation Marketing Associate gflores@cncda.org 23
Creating Clarity for California Dealers Over the past several months, California’s franchised dealers have had to keep pace with federal regulations evolving faster than any one operator can reasonably track. Despite the Fifth Circuit’s decision invalidating its original CARS Rule, the Federal Trade Commission made clear in its March warning letters to 97 dealer groups that the underlying philosophy of that rule, namely that dealer-imposed charges must be included in the advertised price, remains its focus. While much of the guidance in those letters is somewhat nebulous, the overall direction is that dealers must use clear, inclusive total price advertising. However, the devil is in the details, as the FTC’s practical implementation guidance is at odds with the adopted SB 766, the California CARS Act, which takes effect on Oct. 1 of this year. After considerable debate in Sacramento, the CARS Act permits dealers to itemize certain charges rather than fold the entire transaction into a single advertised total. How are California’s dealers expected to reconcile the two sets of guidelines? This unpredictable regulatory environment is one of CNCDA’s chief concerns, and we’ve conveyed it both publicly and in ongoing conversations with NADA, the FTC and California regulators. The Commission needs to account for the state-level framework that our members are currently preparing for. In the meantime, this confusion becomes a serious liability for dealers without the staff or resources to monitor these changes to determine how to stay in compliance. This is precisely the work the association does on behalf of our members. CNCDA has long served as the link between Sacramento, Washington and the dealership floor, translating shifting expectations into practical guidance dealers can follow to effectively run their stores, rather than leaving dealers to guess and hope they comply with new and changing rules. Additionally, CNCDA’s work isn’t finished when a rule is announced. We continue to press for clarification as agencies produce and interpret their own language. When conflicts between state and federal authority surface, we push for practical implementation guidance for your dealerships. No other organization in California is built to do this work for franchised dealers, nor is any solely focused on the success of the franchised-dealer model in the state. Our members expect CNCDA to remain actively engaged. Our compliance alerts, new forms, webinars and direct dialogue with regulators will continue as these rules evolve. Our team will continue to make the case that California’s dealers deserve a framework that doesn’t require them to decipher between state and federal direction to advertise and sell a vehicle honestly. CNCDA will continue to help regulators define a workable set of rules that lets dealers spend their time doing what they do best: putting Californians into safe, reliable, affordable cars they enjoy driving. We know the dust on these issues will not settle soon. But every member should know that CNCDA is hard at work to make sure our members are operating with the clarity they are owed as they continue building the success of their businesses. PRESIDENT’S MESSAGE BRIAN MAAS President, CNCDA 6 California New Car Dealer Quarterly
2026 Officers and Directors EXECUTIVE COMMITTEE Jessie Dosanjh CHAIRMAN Stevens Creek Chevrolet Devinder Singh Bains VICE CHAIRMAN Turlock Chrysler Dodge Jeep Ram Ryan Fitzpatrick SECRETARY/TREASURER Coliseum Lexus of Oakland Robb Hernandez IMMEDIATE PAST CHAIRMAN Camino Real Chevrolet Tony Toohey REGION 1 VICE PRESIDENT Auburn Toyota Mark Normandin REGION 2 VICE PRESIDENT Normandin Chrysler Dodge Jeep Ram Cheryl Bedford REGION 3 VICE PRESIDENT Sunset Auto Center John Oh REGION 4 VICE PRESIDENT Lexus of Westminster Sal Gonzales REGION 5 VICE PRESIDENT Culver City Volvo California New Car Dealer Quarterly 8
DIRECTORS REGION 1 Randy Denham SJ Denham Inc. Matthew Hall AutoNation Western Region Taz Harvey Dublin Mazda Rick Niello The Niello Company Tony Toohey Auburn Toyota REGION 2 Jessie Dosanjh Stevens Creek Chevrolet Ryan Fitzpatrick Coliseum Lexus of Oakland Dave Moeller City Toyota Mark Normandin Normandin Chrysler Dodge Jeep Ram Devinder Singh Bains Turlock Chrysler Dodge Jeep Ram REGION 3 Cheryl Bedford Sunset Auto Center Don Groppetti Nissan of Visalia Bill Hatfield Hatfield Buick GMC Ted Nicholas Three-Way Chevrolet Cadillac Ellena Woodhams‑Sweet Fresno Acura REGION 4 James Graham Santa Margarita Ford Jared Hardin Hardin Buick GMC John Oh Lexus of Westminster David Simpson Simpson Buick GMC Cadillac of Buena Park Craig Whetter Wilson Automotive Group REGION 5 Anne Smith Boland Bob Smith BMW Tom George Thorson Motor Center Sal Gonzalez Culver City Volvo Rinaldi Halim Sierra Automotive Group Robb Hernandez Camino Real Chevrolet 9 California New Car Dealer Quarterly
©2026 The Reynolds and Reynolds Company. All Rights Reserved. Printed in the USA. 05/26. Take advantage of your free F&I Document Review. Visit us at law553.com/cp/complianceconsultants From Statute to Strategy: Helping Dealers Navigate the CARS Act Beginning on October 1, dealers will face additional obligations under the California CARS Act (“the Act”). California dealers are no strangers to the complex regulatory environment, and staying prepared has always been important if government regulators or private plaintiff attorneys come knocking. There are many ways dealers can protect their business, but proper documentation remains a cornerstone of any legal defense. LAW® F&I documents have been trusted by California dealers for decades. Working closely with CNCDA, Reynolds’ product development team is updating the California LAW F&I Library® with new and revised documents designed to help dealers meet the Act’s strict requirements. Matt Chacey, Product Development Attorney and Manager of Reynolds’ LAW F&I Library development, has been leading Reynolds’ CARS Act response and coordinating with CNCDA for more than a year. “Our partnership with CNCDA is built on a shared commitment to helping dealers navigate the real-world regulatory complexity of selling and leasing vehicles. By collaborating early on legislative changes like the California CARS Act, we create practical solutions that drive compliance, promote clear and transparent transaction terms, and build trust between dealers and their customers.” Chacey joined CNCDA’s Chief Legal Officer, Anthony Bento, for a webinar to provide dealers with a practical walkthrough of their new obligations and the LAW documents crafted to help meet them. If you missed the webinar live, it’s available to purchase anytime at www.cncda.org/events. When regulators investigate or plaintiffs file suit, documentation is often critical to the outcome. Dealers who can produce signed, clearly worded documents showing full disclosure, customer understanding, and an opportunity to ask questions are in a far stronger position than those relying on staff memory or inconsistent paperwork. LAW F&I documents are crafted by attorneys well-versed in automotive sales and finance law and serve multiple functions when it comes to helping dealers protect their business. They establish a clear record of what customers were presented and agreed to, while also demonstrating the dealership follows a consistent, policy-driven process. Both are critical to building a strong defense. Given the importance of proper documentation, dealers should partner with a trusted provider. Documents that are outdated, missing important information, or inconsistent with current state and federal laws don’t just fail to help, they can actively work against dealers. Courts and regulators are not sympathetic to compliance gaps, and obsolete or incomplete documents invite further scrutiny. That’s why partnering with an F&I documents provider that actively monitors legislative and regulatory changes, and updates its library accordingly, is essential to running a dealership. LAW’s decades-long collaboration with CNCDA reflects that commitment, ensuring California dealers have the documents they need to help protect their businesses.
A MULTI-CASE REVIEW BY JOE JANKOWSKI Managing Member, Armatus Dealer Uplift Introduction In California, conversations around warranty reimbursement are increasingly tied to a broader challenge dealers face every day: the shortage of certified technicians and the rising cost of retaining them. At the 2026 Dealer Day and in ongoing discussions with dealers across the state, one theme continues to surface. If warranty work is not compensated at a level that reflects current market pricing, it becomes even harder for dealers to attract and keep the skilled technicians their service departments depend on. While California’s retail warranty reimbursement framework is among the strongest in the country, achieving that outcome is often more complex. Over the past several years, discrepancies have emerged in how manufacturers evaluate and approve dealers’ warranty parts and labor rate adjustment requests. Dealers have observed inconsistent applications of rules and policies, shifting interpretations of “warranty-like” qualifications, and contradictory inclusion and exclusion decisions across submissions for a given store year over year, within parts and labor submissions for the same store and between similarly situated dealers. These inconsistencies constitute what can only be described as disparate treatment. This article presents multiple documented examples illustrating how identical or near-identical repair orders Disparate Treatment by Manufacturers in Warranty Parts & Labor Rate Increase Evaluations 11 California New Car Dealer Quarterly
and methodologies have been treated differently by the same manufacturer under variable internal guidelines. Each case study highlights the lack of evaluation consistency, transparent standards and uniform enforcement of manufacturer policies across all dealer submissions. Case Study 1: Same Store Parts & Labor Submissions with Different Rules A dealer submitted requests for warranty parts and labor rate increases during mid-2025. The requests were submitted to their manufacturer in quick succession — both within a one-month period. After reviewing the labor request (which was submitted for review first), the manufacturer approved the dealer for a slightly reduced warranty labor rate, having made several adjustments inconsistent with rules and policies upheld in years prior. Just two days later, the dealer filed a parts request using nearly the same set of repair orders; 89 out of 90 days used in each request overlapped, with a variance of only a single day. Each submission was prepared under identical rules, with parts adjusted based on the manufacturer’s RO-by-RO feedback provided in response to the dealer’s labor request. Despite the nearly identical range, the manufacturer cited and adjusted the handling of 19 entirely different repairs that were not cited in the manufacturer’s review of the previously approved labor sample. In other words, the manufacturer’s rules regarding what constitutes a “qualifying repair” had changed within just a 48-hour period. The dealer, therefore, requested that the parts markup be approved using the same methodology and logic that governed the labor approval, proposing an amended markup aligned with the original figure requested, rather than the three-point reduction resulting from this disparate treatment. When submissions are prepared utilizing the same methodology, manufacturers should ensure parity across evaluations. Divergence in review criteria between labor and parts requests undermines procedural fairness and erodes dealer confidence in manufacturer processes. Case Study 2: Statutory Interpretation and Shifting Rules In another case, a dealer challenged a manufacturer’s inconsistent interpretation of a state warranty statute, year over year, with no relevant change to the state statute in reference. In early 2025, the manufacturer in question cited the absence of “warranty-like” language in the applicable state statute, asserting that repairs completed due to damage/ outside influence (rodent damage, accident damage and other factors that would never be covered under a manufacturer’s warranty) should be included in the calculation. This interpretation was completely off base, considering the fact that the entire intent of the statutory language is to include work that would be covered under a manufacturer’s warranty and to exclude work that is not. The manufacturer’s very own behavior contradicted their previously stated stance. In 2023, the manufacturer took the exact opposite stance to reduce the exact same dealer’s request, having stated that repairs completed due to “outside influence” should be removed from the calculation, only to reverse that position in 2025 when doing so worked to the manufacturer’s advantage. In both cases, the stance taken resulted in a reduced submitted rate; excluding such repairs reduced the dealer’s approved rate in 2023, while including this category reduced the approved rate in 2025. Having taken notice of this contradiction, the dealer asserted a claim of disparate treatment, arguing that the manufacturer’s inconsistent rule application constituted an unfair practice. However, the manufacturer was unwilling to amend its stance, ultimately stating that its handling of the request in 2025 was aligned with the state statute’s guidelines, offering no further insight into why the dealer’s requests were handled differently year over year, in accordance with the same statutory guidelines. When manufacturers alter interpretive positions without a transparent rationale, they invite credible claims of disparate treatment. Even if statutory language supports flexibility, manufacturers should maintain internal consistency to preserve fairness and trust. Case Study 3: Year-Over-Year and Store-To-Store Inconsistency Between 2020 and 2023, this dealer completed retail warranty submissions successfully under state law without issue, achieving full approvals for each request. Over the course of this time frame, the manufacturer in question consistently excluded certain repair categories as maintenance and/or “not warranty-like,” including brakes, wiper blades, keys, wheel locks and carbon cleaning, to name a few, from retail warranty calculations. In 2024, however, with no change to the language in the state statute, the manufacturer erroneously included these categories for the first time without explanation, significantly lowering the dealer’s requested rate. When the dealer challenged the inconsistency, citing past handling of their requests and 12 California New Car Dealer Quarterly
the non-warranty-like nature of the now-included repairs. In 2025, just a few months later, the dealer proceeded with submitting new requests for both parts and labor, following the same policies that the manufacturer had followed from 2020-2023 — excluding categories consistent with maintenance and/or non-warranty like circumstances, and disregarding the manufacturer’s 2024 stance that these categories should now be included. Surprisingly, the manufacturer reverted to the pre-2024 standards, approving both parts and labor submissions without any adjustments or reference to the prior year’s disagreements. When manufacturers inconsistently apply policies for repair qualification, without rationale or notice, to determine retail warranty rates, dealers are left with uncertainty and doubt about manufacturer expectations and intentions regarding reimbursement at true retail. Conclusion Across all cases, one theme persists: inconsistent application of evaluation criteria by manufacturers. Dealers have demonstrated that identical methodologies, repair categories and submission frameworks have been treated differently depending on timing, store or request type. This body of evidence illustrates how some manufacturers change their interpretation of statutory language, whether in designating “warranty-like” qualifications, adhering to state statute requirements, or determining inclusion and exclusion of specific repair categories based on internal criteria. This is not an indictment of all manufacturers; in all fairness, several of them properly adhere to statutory requirements and consistently apply their internal policies. For fairness and credibility to prevail in manufacturer-dealer relationships, evaluation criteria should be applied uniformly, transparently and consistently across all rate requests — regardless of year, dealer or submission type. Only through consistency can the process maintain legitimacy and support mutual trust between dealers and manufacturers. Joe Jankowski is the Managing Member of the Hunt Valley, Maryland-based Armatus Dealer Uplift, a firm specializing in retail warranty reimbursement submissions. Armatus has completed over 22,000 successful submissions nationwide. Joe has been personally involved in consulting on 25 retail warranty statutes and is widely recognized as a subject-matter expert in this highly technical arena. Previously, Joe spent more than 20 years as CFO, COO and CEO of a large automotive group in Maryland. 13 California New Car Dealer Quarterly
Anthony Bento Chief Legal Officer Hometown: Sacramento, California With CNCDA since: January 2017 Tell us about your background. How did you end up at CNCDA? I double-majored in film and digital media and in politics in college. After college, I worked as a photographer in New York, but I realized it wasn’t a great career choice. After that, I held a series of jobs back in California and went to law school. After graduating from law school in 2013, I joined a mid-sized law firm in Sacramento as an associate. In late 2016, I decided it was time for a change when a recruiter contacted me about a job opportunity at CNCDA. What does your current position entail? I’m the Chief Legal Officer, which means I’m the association’s lead in-house attorney. In addition to reviewing contracts and other routine legal matters, I manage our association’s litigation efforts. I help our lobbying team understand the impact of proposed legislation and regulations on our industry, and I serve as the chief architect of our member compliance resources, including manuals and webinars. I am also the architect of many state franchise laws that protect California dealers from unfair practices. When should a dealer member reach out to you? Dealers should contact me if they’re encountering issues with their manufacturers or need information about California law. Dealers can also contact our legal hotline at (916) 441-2599 for help. My colleague, Les Swizer, is the lead on the hotline, and he’s a very knowledgeable resource. What’s a project you’re currently working on that directly impacts our members? My biggest project right now is our lawsuits against VW/Scout and Honda for their unlawful direct sales plans. It’s not an overstatement to say that the outcome of this litigation will greatly impact our industry for decades to come. It’s critical that dealers draw a line in the sand to block unfair competition from their automaker partners. What do you enjoy most about working with California’s dealer community? People who work at dealerships are dynamic, interesting and hard-working. They’re a critical part of the state’s economy, and it’s a privilege to work in an industry that is undergoing such incredible changes. It feels like every day, something is new in retail automotive. What’s something about you that people might be surprised to learn? I’m getting married in October! I also just bought a house with my fiancée, Liz. We’re very excited. Coffee or tea? Early bird or night owl? Both. I need my coffee in the morning, but tea often gets me through the afternoon. And I’m definitely a morning person. My brain doesn’t want to work hard after dinner. What was your first car? A 2001 Saturn L300. Any hidden talents or fun facts most people don’t know about you? I still love taking photos, especially landscapes. I’m also an avid skier and cyclist — when I’m not working on my new home! Under the Hood 14 California New Car Dealer Quarterly
Lauren Johnston Membership & Finance Manager Hometown: Rocklin, California With CNCDA Since: August 2017 Tell us about your background. How did you end up at CNCDA? My background is in communications and operations. I spent several years in public affairs and nonprofit work before joining CNCDA in 2017. I started out supporting our board of directors and senior staff and, over time, grew into my current role as Membership & Finance Manager. What does your current position entail? I manage our member database and keep the systems running that connect CNCDA to our dealer community. I also work with Michael, our CFO, on the financial side, including accounts receivable and budgeting. On any given day, I might be updating membership records, following up on payments or working through a data issue. I do a little bit of everything, which keeps things interesting. When should a dealer member reach out to you? If you have questions about your membership — your account status, contact information on file, member benefits or anything else — I’m a great first call. When in doubt, start with me, and I’ll point you in the right direction. What’s something you work on behind the scenes that directly benefits our dealer members? I’m constantly working to ensure our membership records are accurate and up to date so the right people get the right information when they need it. Whether it’s a compliance update, event invitation or dues renewal, none of it reaches the right people if our records aren’t accurate. It has a real ripple effect on everything we do. What’s a project you’re currently working on that directly impacts our members? Right now, I’m focused on the systems we use to manage our membership data. The goal is to make our operations more efficient and our member experience smoother so that interactions with CNCDA feel seamless, whether you’re renewing your membership, accessing resources or registering for an event. It’s a big lift, but I’m excited about what it will mean for our members in the long term. What do you enjoy most about working with California’s dealer community? Our members and dealer leadership are hardworking, engaged, and deeply invested in their businesses and their customers. And I’m always learning! Before joining CNCDA, I never could have appreciated just how many rules and regulations impact dealerships. It’s a more complex industry than most people realize, and that keeps my work interesting. What’s something about you that people might be surprised to learn? Before becoming a mom, I read about 50 books per year. These days, I’m reading a little slower, but I almost always have more than one book in rotation. Coffee or tea? Early bird or night owl? Coffee! My husband and son bring me coffee in bed every morning — it’s my favorite morning routine. I’m not a morning person, so I need a hit of caffeine when I wake up. What was your first car? A Toyota Solara. Any hidden talents or fun facts most people don’t know about you? I’m an avid home cook. We have an imaginary family restaurant at home, and we’re always adding new dishes to the menu. GETTING TO KNOW YOUR CNCDA STAFF 15 California New Car Dealer Quarterly
Dealer Day 2026 Recap The California New Car Dealers Association would like to express our appreciation to all who attended Dealer Day 2026 in Sacramento. We appreciate all of the dealer members, sponsors, vendors and partners who attended and gave their time to advocate for the future of California’s automotive industry. We hope you will join us again for Dealer Day 2027 at the Sacramento Convention Center! Additionally, we want to thank our sponsor partners who helped make this event possible for our membership. Thank you again for your dedication to our industry and cause. We hope to see you all next year! If you would like a high-res version of any of these images, please contact Autumn Heacox, Director of Communications & Marketing, at aheacox@cncda.org. 16 California New Car Dealer Quarterly
17 California New Car Dealer Quarterly
DEALER DAY 2026 RECAP 18 California New Car Dealer Quarterly
DEALER DAY 2026 RECAP 19 California New Car Dealer Quarterly
DEALER DAY 2026 RECAP 20 California New Car Dealer Quarterly
DEALER DAY 2026 RECAP 21 California New Car Dealer Quarterly
Your magazine: On your phone, on your tablet, on your schedule. connected stay 22 California New Car Dealer Quarterly
MANNING LEAVER LEGAL LANE The Unlicensed Driver Dilemma LEGAL RISKS AND BEST PRACTICES FOR CALIFORNIA DEALERS BY TIMOTHY D. ROBINETT, ESQ. Partner, Manning, Leaver, Bruder & Berberich LLP Vehicle dealers regularly encounter situations involving unlicensed prospective drivers, whether during test drives, the sales process or vehicle delivery. While there is nothing in California law that prohibits a dealer from selling a vehicle to an unlicensed buyer, California law does provide clear statutory guidance for vehicle owners who permit unlicensed drivers to operate their vehicles. In addition, California courts have addressed the potential for a dealer’s liability after the sale. Dealers can minimize their exposure by implementing strict license-verification protocols for any test drives or loaners, documenting the delivery of a vehicle to a licensed driver or to a transporter, and employing protocols for obtaining written disclosures when the buyer is unlicensed. What About Test Drives or Loaner Vehicles? California law imposes duties on vehicle owners regarding who may drive their vehicles on public highways. Specifically, California Vehicle Code section 14606 prohibits employing, hiring, knowingly permitting or authorizing any person to drive a motor vehicle upon a highway unless that person holds a valid driver’s license appropriate for the vehicle’s class. Further, section 14604(a) provides that an owner may not knowingly allow another person to drive the owner’s vehicle unless the owner determines that the person has a valid driver’s license. The owner must make a reasonable effort or inquiry to determine license validity, but there is 23 California New Car Dealer Quarterly
Dealers can reduce their exposure by focusing on when they authorize a vehicle’s operation and by documenting reasonable efforts to ensure the vehicle is operated by a licensed, competent driver. no requirement to check with the Department of Motor Vehicles. When the dealer remains the vehicle’s owner and authorizes its operation — as is typical in test drives, loaners or courtesy vehicles — sections 14606 and 14604(a) are directly implicated. Dealers must make a reasonable effort or inquiry to ensure the driver is currently licensed and qualified for the vehicle’s class before permitting operation, and should document that verification. These scenarios are the highest negligent entrustment risk because the dealer is affirmatively entrusting the operation. Can I Sell a Vehicle to an Unlicensed Driver? California law does not prohibit a dealer from selling a vehicle to an unlicensed driver. However, doing so without already having solid policies in place could still lead to liability if the unlicensed buyer were to cause harm to someone. The most common claim against a dealer that sells a vehicle to an unlicensed driver who later causes harm to someone is for negligent entrustment. Negligent entrustment arises when one who owns or controls a vehicle entrusts or provides it to a person whom the owner knows or should know is incompetent, unfit or otherwise unable to operate the vehicle safely, which results in harm. The California Court of Appeals in the Dodge Center1 case confirmed that no statute makes it unlawful to sell a vehicle to an unlicensed driver, but section 14604 still imposes a duty on a retailer to inquire into the purchaser’s license status. Dodge Center thus draws a sharp line between selling a vehicle and authorizing its operation. However, the case still leaves open the possibility of liability where a dealer actually authorizes or permits an unlicensed or incompetent driver to operate, or has actual knowledge of the driver’s incompetence under common-law principles. Actual knowledge or circumstances that would put a reasonable person on notice of incompetence are key, and evidence such as obvious intoxication at delivery may create actual or constructive knowledge and potential liability for the dealer. Common-law exposure can arise if the sale is coupled with entrustment of immediate operation under circumstances signaling incompetence. Dealers can reduce risk by decoupling ownership transfer from immediate operation by the unlicensed buyer. Therefore, it is strongly recommended that dealers deliver the vehicle only to a licensed co-buyer or authorized driver; permit commercial transport or removal from the dealer’s premises only under the control of a verified, licensed operator; and document each step. Can I Lease a Vehicle to an Unlicensed Customer? In a lease, the lessor (dealer) remains the vehicle’s owner. As a result, under section 14606, a dealer should not lease a vehicle to an unlicensed driver because the lessor (dealer) is the owner until the lease is assigned to a financial institution. During this period, the owner-permission duties and negligent entrustment risks remain present. Therefore, dealers should only lease vehicles and deliver them after verifying that the lessee (and any other permitted operators) holds a valid license appropriate to the vehicle’s class, and this verification should be thoroughly documented. Financing/Lender Considerations Most financial institutions require dealers to enter into a written dealer agreement that imposes certain duties and obligations on dealers when they assign contracts. Many, if not most, dealer agreements condition funding approval and the assignment of the contract on the dealer’s representation and warranty that the buyer listed on the contract has a valid driver’s license. As a result, the Dodge Center case will not protect a dealer from the financial institutions’ repurchase demand, tender for defense 1. Dodge Center v. Superior Court (1988) 199 Cal.App.3d 332. 24 California New Car Dealer Quarterly
and indemnification, or a claim for breach of the dealer agreement. Therefore, a dealer should review its applicable dealer agreements with its lenders to ensure that selling a vehicle to an unlicensed buyer does not breach the representations and warranties it has made to the lender. Best Practices Checklist for Dealers Dealers can reduce their exposure by focusing on when they authorize a vehicle’s operation and by documenting reasonable efforts to ensure the vehicle is operated by a licensed, competent driver. 1. Test Drives and Loaners: Verify the prospective buyer’s license before handing over keys; confirm proper vehicle class; document the check; and refuse operation if impairment or incompetence is apparent, consistent with California Vehicle Code sections 14606 and 14604(a). 2. Retail Sales to Unlicensed Buyers: Separate the sale from taking delivery and driving the vehicle off the dealer’s lot. Only deliver the vehicle to a licensed co-buyer or authorized driver, document the fact that a licensed driver drove the vehicle by having them sign a Statement of Facts and retain a copy of their driver’s license. Alternatively, have the vehicle delivered to the customer’s residence via commercial transport; retain evidence of the licensed delivery; and have the customer sign a Statement of Facts agreeing not to drive the vehicle on public highways until he/she is properly licensed. 3. Leases: Because the lessor remains the owner, do not enter into a lease with an unlicensed lessee where the lessee will operate the vehicle; verify and document licenses for all permitted drivers under California Vehicle Code section 14606. Also, make sure to check your dealer agreement with your lender. 4. Delivery-Day Sobriety and Fitness: Decline delivery where obvious intoxication, impairment or incompetence is present; reschedule or deliver to a licensed third party or transporter; document the basis and who the vehicle was delivered to. 5. Training and Audits: Train sales, F&I, and service staff on verification and documentation procedures; audit deal jackets and loaner files for compliance with statutory checks and internal policies. The author of this article is a partner at Manning, Leaver, Bruder & Berberich LLP, a Los Angeles law firm that practices throughout California and has been in existence for over 100 years. It has a strong automobile dealer practice covering all areas of the industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, dealer advertising law, dealer association law, new motor vehicle board matters and franchise law. See manningleaver.com for more information and areas of practice. Nothing in this article may be considered as legal advice. Contact legal counsel for legal advice. 25 California New Car Dealer Quarterly
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California Auto Outlook Comprehensive Information on the California Vehicle Market Released April 2026 Covering First Quarter 2026 TM Publication Sponsored By: New Vehicle Registrations Predicted to Decline to 1.74 Million Units in 2026 TWO YEAR PERSPECTIVE Historical Data sourced from Experian Automotive. *2026 forecast by Auto Outlook. Historical figures have been updated since the previous release. California Annual New Light Vehicle Registrations - 2011 thru 2026 ANNUAL TRENDS QUARTERLY RESULTS California Quarterly New Light Vehicle Registrations Percent Change vs. Year Earlier Data sourced from Experian Automotive. 1.19 1.49 1.66 1.78 1.99 2.03 2.03 1.99 1.89 1.60 1.77 1.58 1.76 1.75 1.80 1.74 0.0 0.5 1.0 1.5 2.0 2.5 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26* New vehicle regs. (millions) Years California U.S. YTD '25 YTD '26 Change YTD '25 YTD '26 Change Registrations TOTAL 457,525 416,810 -8.9% 3,871,053 3,692,010 -4.6% Car 119,235 100,920 -15.4% 691,714 591,023 -14.6% Light Truck 338,290 315,890 -6.6% 3,179,339 3,100,987 -2.5% Domestic 145,356 125,512 -13.7% 1,596,361 1,513,311 -5.2% European 69,534 60,551 -12.9% 404,197 345,924 -14.4% Japanese 195,533 186,497 -4.6% 1,454,533 1,415,057 -2.7% Other Asian 47,102 44,250 -6.1% 415,962 417,718 0.4% Market Share Car 26.1 24.2 -1.9 17.9 16.0 -1.9 Light Truck 73.9 75.8 1.9 82.1 84.0 1.9 Domestic 31.8 30.1 -1.7 41.2 41.0 -0.2 European 15.2 14.5 -0.7 10.4 9.4 -1.0 Japanese 42.7 44.8 2.1 37.7 38.3 0.6 Other Asian 10.3 10.6 0.3 10.7 11.3 0.6 Data sourced from Experian Automotive. Other Asian brands includes Genesis, Hyundai, Kia, and VinFast. 3.5% 7.1% 4.6% 2.9% -2.2% -8.9% 4Q '24 vs. 4Q '23 1Q '25 vs. 1Q '24 2Q '25 vs. 2Q '24 3Q '25 vs. 3Q '24 4Q '25 vs. 4Q '24 1Q '26 vs. 1Q '25 % change vs. year earlier California and U.S New Light Vehicle Registrations Year-to-date 2025 and 2026 thru March State new vehicle market moved lower in first quarter of this year. California new light vehicle registrations declined 8.9 percent during the first three months of this year versus the same period in 2025. The U.S. market fell 4.6 percent. California new vehicle registrations predicted to fall from 2025 to 2026. Statewide new vehicle registrations are predicted to slip to 1.74 million units for all of this year, down 3.4 percent from 2025. This year’s total should easily exceed the recent low point of 1.58 million in 2022. Key forecast determinants point to a decline in new vehicle market. Affordability remains the market’s primary concern. Finance costs are still high due to high interest rates, vehicle transaction prices are nearing $50,000, and income growth is barely keeping up with inflation. Higher tariffs will also negatively impact sales in 2026 because of higher vehicle prices and overall inflation. Unforeseen events like fluctuating tariff rates, the phase-out of BEV tax credits, the war in Iran, and rising gasoline prices have all added to the uncertainty. This has led to a significant drop in consumer confidence, reaching near record lows. The heightened uncertainty makes people hesitant to make big purchases like cars. Pent-up demand should limit the sales decline. New vehicle sales since the onset of the pandemic have been below average. And the Great Recession of 2009 was called great for a reason: it took nearly seven years for sales to return to normal levels. Due to this extended period of belowaverage sales, the vehicle fleet is aging. Vehicle purchases have been postponed, which will provide support to the market. KEY TRENDS IN NEW VEHICLE MARKET 28 California New Car Dealer Quarterly
Page 2 California Auto Outlook Gasoline, 61.1% Hybrid, 20.9% Electric (BEV), 13.7% Diesel, 2.3% Plug In Hybrid (PHEV), 2.0% Fuel Cell, 0.0% Annual Registrations and Market Share Quarterly Registrations and Market Share 2022 2023 2024 2025 YTD '26 1Q '25 2Q '25 3Q '25 4Q '25 1Q '26 ZEV registrations 262165 382283 385452 377605 57111 ZEV registrations 95520 87343 108913 85829 57111 ZEV share 16.6% 21.7% 22.0% 21.0% 13.7% ZEV share 20.9% 18.2% 24.8% 20.1% 13.7% Hybrid regs. (excl. plug ins) 144894 196191 258224 350918 87006 Hybrid regs. (excl. plug ins) 82469 98152 83344 86953 87006 Hybrid share (excl. plug ins) 9.2% 11.1% 14.8% 19.5% 20.9% Hybrid share (excl. plug ins) 18.0% 20.5% 19.0% 20.4% 20.9% PHEV regs. 41909 60515 60825 63634 8308 PHEV regs. 17049 18859 16680 11046 8308 PHEV share 2.7% 3.4% 3.5% 3.5% 2.0% PHEV share 3.7% 3.9% 3.8% 2.6% 2.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2018 2019 2020 2021 2022 2023 2024 2025 YTD '26 Market Share ZEVs Hybrids (excl. plug ins) PHEVs 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2Q '24 3Q '24 4Q '24 1Q '25 2Q '25 3Q '25 4Q '25 1Q '26 Market Share ZEVs Hybrids (excl. plug ins) PHEVs Vehicle Powertrain Dashboard Annual Quarterly ZEV share fell from 21.0% in 2025 to 13.7% in 1Q ‘26. Market Share for all Powertrain Types - YTD 2026 thru March California and U.S. Markets California ZEV market share YTD ‘26 thru Mar. 13.7% ❏ Gasoline powered vehicles accounted for 61.1 percent of state new vehicle registrations during the first three months of this year, up from 54.0 percent in 2025. ❏ Combined share for BEVs, PHEVs, hybrids, and fuel cell vehicles was 36.6 percent in the first quarter of this year, down from 43.8 percent in 2025, but up significantly from just 11.6 percent in 2018. ❏ ZEV market share declined to 13.7 percent in the first quarter of this year, while hybrid vehicle share grew to 20.9 percent. Electric and Hybrid Vehicle Market Share U.S. ZEV market share YTD ‘26 thru Mar. 5.2% California share of U.S. ZEV registrations YTD ‘26 thru Mar. 29.6% Data sourced from Experian Automotive. Data sourced from Experian Automotive. ZEV market share declined to 13.7% in Q1 ‘26, the lowest share since 4Q ‘21. Data sourced from Experian Automotive. ZEVs are full battery electric vehicles and include fuel cell vehicles. PHEVs are plug in hybrids. Hybrid vehicle registrations and market share excludes mild hybrids. 29 California New Car Dealer Quarterly
Page 3 California Auto Outlook Vehicle Powertrain Dashboard Make and Model Registrations for Hybrids, ZEVs, and PHEVs in California ZEVs are full battery electric vehicles (BEVs) and fuel cell vehicles. PHEVs are plug in hybrids. Data sourced from Experian Automotive. Top 25 Selling Hybrid, ZEV, and PHEV Models - YTD ‘26 thru Mar. Rank Model Type Regs. 1 Tesla Model Y ZEV 22,907 2 Toyota Camry Hybrid 14,903 3 Honda CR-V Hybrid 8,315 4 Tesla Model 3 ZEV 5,688 5 Honda Civic Hybrid 5,507 6 Toyota RAV4 Hybrid 4,770 7 Honda Accord Hybrid 4,330 8 Toyota Corolla Hybrid 3,639 9 Toyota Sienna Hybrid 3,252 10 Toyota Grand Highlander Hybrid 3,027 11 Hyundai Ioniq 5 ZEV 2,778 12 Lexus RX Hybrid 2,714 13 Ford Maverick Hybrid 2,631 14 Kia Sportage Hybrid 2,588 15 Toyota bZ4X ZEV 2,527 16 Hyundai Santa Fe Hybrid 2,201 17 Hyundai Tucson Hybrid 2,194 18 Toyota Prius Hybrid 2,139 19 Mazda CX-50 Hybrid 1,963 20 Lexus NX Hybrid 1,827 21 Kia Niro Hybrid 1,805 22 Subaru Forester Hybrid 1,704 23 Tesla Model X ZEV 1,652 24 Ford Mustang Mach-E ZEV 1,578 25 Rivian R1S ZEV 1,520 California New Zero Emission Vehicle Registrations by Make YTD 2025 and YTD 2026 thru March Registrations Market Share (%) YTD '25 YTD '26 % Change YTD '25 YTD '26 Change TOTAL 95,520 57,111 -40.2 Acura 1,279 11 -99.1 1.3 0.0 -1.3 Audi 2,319 210 -90.9 2.4 0.4 -2.0 BMW 5,301 2,180 -58.9 5.5 3.8 -1.7 Cadillac 1,512 1,771 17.1 1.6 3.1 1.5 Chevrolet 4,641 1,875 -59.6 4.9 3.3 -1.6 Dodge 79 16 -79.7 0.1 0.0 -0.1 Ford 5,758 2,374 -58.8 6.0 4.2 -1.8 Genesis 546 92 -83.2 0.6 0.2 -0.4 GMC 913 376 -58.8 1.0 0.7 -0.3 Honda 4,510 832 -81.6 4.7 1.5 -3.2 Hyundai 5,156 3,586 -30.4 5.4 6.3 0.9 Jeep 147 42 -71.4 0.2 0.1 -0.1 Kia 3,002 1,554 -48.2 3.1 2.7 -0.4 Lexus 481 1,405 192.1 0.5 2.5 2.0 Lucid 959 1,315 37.1 1.0 2.3 1.3 Mazda 2 0 -100.0 0.0 0.0 0.0 Mercedes-Benz 3,617 654 -81.9 3.8 1.1 -2.7 MINI 207 61 -70.5 0.2 0.1 -0.1 Nissan 1,447 150 -89.6 1.5 0.3 -1.2 Other 1,059 133 -87.4 1.1 0.2 -0.9 Polestar 316 219 -30.7 0.3 0.4 0.1 Porsche 1,335 409 -69.4 1.4 0.7 -0.7 Ram 1 14 1300.0 0.0 0.0 0.0 Rivian 2,872 1,841 -35.9 3.0 3.2 0.2 Subaru 924 465 -49.7 1.0 0.8 -0.2 Tesla 42,211 31,958 -24.3 44.2 56.0 11.8 Toyota 1,886 2,599 37.8 2.0 4.6 2.6 Volkswagen 2,404 445 -81.5 2.5 0.8 -1.7 Volvo 636 524 -17.6 0.7 0.9 0.2 0 20000 40000 60000 80000 100000 120000 YTD '25 YTD '26 YTD '25 YTD '26 YTD '25 YTD '26 Hybrid ZEV PHEV New vehicle registrations Franchised Direct Alternative Powertrain Sales by Type of Selling Dealership - YTD ‘25 and ‘26 thru March ❏ The graph on the left shows new vehicle registrations for Hybrids, ZEVs, and PHEVs broken down by type of selling dealership. Franchised dealerships accounted for more than 76.9 percent of combined sales for all three alternative powertrain types during the first three months of this year. ❏ Hybrid registrations exceeded 87,000 units in the first quarter of this year, all of these vehicles were sold by franchised dealerships. Data sourced from Experian Automotive. 30 California New Car Dealer Quarterly
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