Official Publication of the California New Car Dealers Association Join the Fight, Support the Fund PAGE 5 CNCDA NextGen Conference Recap June 16-18, 2026 PAGE 10 CNCDA Member Appreciation Dinner June 17, 2026 PAGE 13 2026 ISSUE 3
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5 PRESIDENT’S MESSAGE Join the Fight, Support the Fund By Brian Maas, President, CNCDA 6 2026 Officers and Directors 8 Documents Designed to Help Dealers Navigate the CARS Act 10 CNCDA NextGen Dealers Conference Recap June 16-18, 2026 13 CNCDA Member Appreciation Dinner June 17, 2026 16 Under the Hood Getting to Know Your CNCDA Staff 19 MANNING LEAVER LEGAL LANE The California CARS Act: Dealer Litigation Ahead What Dealers May See When the New Rules Hit the Courtroom By Daniel F. Berberich, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 23 Why Every Dealership Acquisition Should Begin with a Retail Warranty Reimbursement Review By Jordan Jankowski, Chief Operating Officer, Armatus Dealer Uplift 25 CNCDA 2026 Sponsors 27 California Auto Outlook Covering Second Quarter 2026 ©2026 The California New Car Dealers Association (CNCDA) | MBR Connect™. 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. 10 Contents 2026 ISSUE 3 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 Davis Director of Strategic Partnerships rdavis@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 Industry Relations Manager fpalombi@cncda.org Genesis Flores CNCDA Foundation Marketing Associate gflores@cncda.org 23
Join the Fight, Support the Fund A federal judge in San Diego denied Volkswagen and Scout Motors’ motion to dismiss this past March. The case is now in discovery, which means two years of work CNCDA has put into this fight is about to be tested in open court, and stakeholders are waiting and watching. For two years, CNCDA has fought to ensure California law is upheld, first against Sony Honda’s Afeela brand and now against Volkswagen’s Scout Motors. Protecting franchised dealers is the reason this association exists, and we’ve been defending you, our members, for over 100 years. Now, manufacturers are testing us, and we will not go quietly. The first attempts to skirt the law began in October 2024, when VW/Scout announced plans to sell directly to consumers in California. Sony Honda followed three months later with similar plans for their Afeela brand. CNCDA then sued VW/Scout in federal court in April 2025 and sued Honda/ Afeela in California state court in August of that year, arguing that both manufacturers were violating AB 473, a law our dealers fought to pass in 2023, which specifically bans this type of direct competition. Both manufacturers moved to dismiss. Both motions failed. Roughly one year later, the court ruled that our case against Honda could proceed. Honda then announced the suspension of its Afeela project, and our case against Honda has since concluded. However, Sony and Honda could make these attempts to sell new models directly to consumers again in the future. With regard to our Volkswagen litigation, the court denied Scout’s motion to dismiss, bringing renewed momentum to our case. Separately, this past April, 14 VW dealers filed protests against VW/Scout at the New Motor Vehicle Board, with funding provided by CNCDA. That brings us to where California’s dealers are today: in discovery in federal court. Notably, roughly 20 other states have similar franchise protection laws that safeguard dealers from manufacturers using their size and capital to circumvent the dealers who built their brands in the first place. Undoubtedly, courts across the country look to rulings from states with comparable statutes when deciding their own cases. Don’t forget, California is the largest new-vehicle market in the country by a wide margin, and any manufacturer pursuing a direct-to-consumer strategy needs OUR market to make that strategy work. A ruling in our favor here becomes the precedent other states cite. Every manufacturer is watching, and when we prevail, they will see that our resolve and defense of the law will not waver and that this model will not succeed in California or any other state. However, our victory cannot happen without resources. Expert witnesses, discovery, briefings and the hours our outside counsel puts into building a strong court case all cost real money. CNCDA has covered these expenses for 25 years without asking anything of our members. Now, with the stakes as high as they’ve ever been, we believe the time has come to call on your support to help us muster the show of strength we need. While NADA has provided some financial support for our efforts, we’re asking California dealers (whether you sell Volkswagens or not) to contribute a suggested amount of $5 per vehicle sold at your dealership in 2025. That said, ANY contribution is appreciated and helps us fight the good fight. Scan the QR code to learn more or donate today. https://www.cncda.org/ defend-your-franchise Contributions to the CNCDA Legal Fund aren’t political donations and aren’t tax-deductible, but they’re the most direct way to put your resources behind our defense as we shape industry operations in California for years to come. If you’ve never contributed to our legal work, this is the time to start. A ruling in our favor doesn’t just resolve one lawsuit. Your financial support protects your dealership now and for future generations. Most importantly, it sets the precedent that California’s dealers will not be brushed aside, and we will not back down. PRESIDENT’S MESSAGE BRIAN MAAS President, CNCDA 5 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 6
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 7 California New Car Dealer Quarterly
©2026 The Reynolds and Reynolds Company. All Rights Reserved. Printed in the USA. 08/26. Learn more about these documents and how LAW can help you prepare for October 1. Visit us at law553.com/cp/complianceconsultants Documents Designed to Help Dealers Navigate the CARS Act The California CARS Act brings the most significant changes to the vehicle sales process since the 2005 Car Buyer’s Bill of Rights. That’s why LAW® and CNCDA have been working together to help dealers prepare, including co-presenting a webinar in July and at Reynolds’ Amplify conference in August. Both presentations walked dealers through what’s changing and the documents designed to help dealers navigate these new obligations. LAW recently added eight new or revised documents to the California LAW F&I Library® to help dealers prepare for when the CARS Act goes into effect on October 1. Together, they address four essential areas that will require attention: • Vehicle’s “Total Price” • Monthly Payment and Comparison Disclosures • Add-Ons Benefits and Disclosures • 3-Day Right to Cancel for Certain Used Vehicles Of the four areas, the 3-Day Right to Cancel may have the biggest operational impact because it requires dealers to create and follow new processes. Under the Act, buyers and lessees of used vehicles priced at $50,000 or less will have three-day right to cancel, beginning the day after signing. Dealers may charge a restocking fee if a customer exercises that right. If a customer traded in a vehicle, the dealer must return it unless it has already sold or the dealership has begun transferring the trade-in’s title. If the tradein cannot be returned, the dealer will owe a refund instead. The new obligations extend beyond the paperwork. In addition to including a Cooling-Off Notice on the first page of the purchase or lease agreement, dealers must also display a physical notice in every sales office or cubicle where written terms could be discussed, as well as in each room where contracts are regularly executed. The following documents were created or revised in response to the California CARS Act: • Retail Installment Sale Contract (LAW 553) • Pre-Contract Disclosure • 3-Day Right to Cancel Used Car Purchase or Lease • Acknowledgement of Cancellation and Receipt • Notice of Failure to Meet Cancellation Requirement(s) • Total Price Disclosure • Optional Add-On Products or Services Disclosure • Cooling-Off Poster With the exception of the Cooling-Off Poster, all documents listed are available in English, Spanish, Chinese, Korean, Tagalog, and Vietnamese in both pre-printed and electronic formats. They are available for order now but should not be used until October 1. Dealers can watch the webinar recording for more indepth information on these documents and the Act’s key areas. Helping dealers prepare for the California CARS Act is just the latest example of the long-standing partnership between LAW and CNCDA. LAW’s history in California dates back to 1929, when the brand was founded in Oxnard, so supporting Golden State dealers is something we take seriously. To learn more about these new documents, contact your dedicated Compliance Consultant and schedule your free F&I Document Review and help ensure you’re ready when the Act takes effect October 1.
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.
CNCDA JUNE 16-18, 2026 CNCDA NextGen would like to thank all of our NextGen dealer members and sponsors who attended our Annual Conference at the Silverado Resort in Napa, California. This year, we were thrilled to be able to host our conference alongside the CNCDA Member Appreciation Dinner! We look forward to continuing to build connections with California NextGen dealers at future NextGen events. Conference Recap 10 California New Car Dealer Quarterly
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CNCDA Member Appreciation Dinner JUNE 17, 2026 The California New Car Dealers Association would like to sincerely thank all of our dealer members, sponsors and invited guests who attended our Member Appreciation Dinner at the Silverado Resort in Napa, California. It was a great evening to connect fellow dealers with CNCDA leadership, including our Board of Directors. We look forward to celebrating our members again at our next Member Appreciation Dinner. 13 California New Car Dealer Quarterly
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REBECCA DAVIS, née MATULICH Director of Strategic Partnerships Hometown: Sacramento, California With CNCDA since: 2020 Tell us about your background. How did you end up at CNCDA? Before joining CNCDA, I worked for another California trade association, where I managed trade shows and worked closely with vendors and exhibitors. I joined CNCDA in 2020 as Events Manager and later became Director of Education & Events, overseeing our events and educational programs. In 2025, I moved into my current role as Director of Strategic Partnerships. It was a natural transition for me because I’ve always enjoyed building relationships, connecting people and finding new ways to create value for our members. What does your current role and position entail? I oversee CNCDA’s strategic partnerships, including our sponsorship and Licensed Vendor programs. I spend a lot of my time building relationships with companies serving the automotive industry and identifying opportunities to connect the right companies with our dealers. I also manage our existing partner relationships and work with them to create meaningful opportunities through our events, education, thought leadership and other programs. When should a dealer member reach out to you? What kinds of questions or issues are you the best resource for? I want to hear from dealers when they’re working with a great company that isn’t currently part of the CNCDA partner ecosystem. Some of our best partnership opportunities come directly from dealer recommendations, and hearing what’s working well in their stores helps us identify companies that could bring value to the broader membership. Dealers should also reach out when they’re looking for a trusted industry resource, vendor or solution and aren’t sure where to start. I work with companies across a wide range of areas in the automotive industry, so I’m always happy to make an introduction or connect a dealer with the right resource. What’s something you work on behind the scenes that directly benefits our dealer members? A lot of what I do happens behind the scenes. I’m constantly talking with companies, evaluating potential partners and negotiating agreements to make sure the companies we align with are a good fit for CNCDA and can provide real value to our dealers. I’m also always looking for gaps in our partner ecosystem and identifying additional resources that could benefit our members. What’s a project you’re currently working on that directly impacts our members? I’m currently working on our 2027 partnership strategy and looking at where we can bring new resources, education and opportunities to our dealers. A big part of that is listening to our dealers’ needs. I’m also working on the team transitioning CNCDA to a new association management system (AMS), which will improve how our members interact with CNCDA and access the resources and information they need. Under the Hood GETTING TO KNOW YOUR CNCDA STAFF 16 California New Car Dealer Quarterly
What do you enjoy most about working with California’s dealer community? The relationships. I really enjoy getting to know our dealers, learning about their businesses and hearing what’s happening in their stores. I also love connecting people, and it’s rewarding when those introductions turn into valuable relationships. What’s something about you that people might be surprised to learn? I have a Great Dane named Clyde who weighs about as much as I do. He’s a very big part of my family — literally. Coffee or tea? Early bird or night owl? Pre-workout! A little extra power for my early morning workouts. What was your first car? My first car was a green Mitsubishi Galant. Any hidden talents or other fun facts about you? Singing! And, in a completely different arena, I was a nationally qualified bikini athlete. MICHAEL WALSH Chief Financial Officer Hometown: Grand Rapids, Michigan With CNCDA since: 2023 Tell us about your background. How did you end up at CNCDA? I have worked in the private accounting sector for 40 years. In 2016, I started working with some associations and small businesses as a consultant. During this time, I met Crystal, Cathy and Rebecca. In 2023, I was recruited by Cathy and Rebecca to join CNCDA. The rest, as they say, is history. What does your current role and position entail? I am the CFO, so I am responsible for safeguarding the association’s assets and financial stability. I am also the Assistant Treasurer of the CNCDA Foundation. I work very closely with the Operations and Membership departments, but I will jump in to help whoever needs assistance. When should a dealer member reach out to you? What kinds of questions or issues are you the best resource for? I can answer membership questions more directly, but I am open to any questions and can make sure you’re connected to the appropriate team member for any I can’t answer. What’s something you work on behind the scenes that directly benefits our dealer members? Supporting the staff in any way possible to help them focus on issues directly related to the dealership world. What’s a project you’re currently working on that directly impacts our members? I currently volunteer a lot of time assisting the CNCDA Foundation with their Career Day events. It is a wonderful opportunity to help show the younger generation the opportunities available to them in the auto industry. It gives me an opportunity to meet many of our dealerships that participate in these events. What do you enjoy most about working with California’s dealer community? I have made it a goal to visit dealerships in all regions to take tours, meet owners and staff and hear the many stories of how it all came about. I use it as an opportunity to ask questions about what we are doing right, how we can help and bring it back to the team to help build our goals and objectives. What’s something about you that people might be surprised to learn? One of my favorite hobbies is horseback riding and taking working ranch vacations. I just completed a week in Montana that was amazing. Almost 70 miles on horseback in five days with unbelievable views. Coffee or tea? Early bird or night owl? Coffee drinks and an EARLY bird. What was your first car? A 1970 Mercury Cougar. 17 California New Car Dealer Quarterly
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MANNING LEAVER LEGAL LANE The California CARS Act: Dealer Litigation Ahead WHAT DEALERS MAY SEE WHEN THE NEW RULES HIT THE COURTROOM BY DANIEL F. BERBERICH, ESQ. Partner, Manning, Leaver, Bruder & Berberich LLP On Oct. 1, the California Combating Auto Retail Scams (CARS) Act becomes operative, bringing significant changes to the way California dealers advertise, sell, finance and lease vehicles. By now, dealers have received considerable information about what the new law requires. Policies are being updated. Forms are changing. Sales and finance personnel are being trained. Dealerships are preparing for new requirements involving advertised prices, add-on products, customer communications, used-vehicle cancellation rights and record retention. But compliance is only part of the picture. Dealers should also consider the CARS Act from another perspective: How will these new requirements translate into future consumer litigation? What Will a CARS Act Case Look Like Two Years From Now? From a litigation perspective, new regulatory requirements should be viewed not only as compliance obligations, but also as potential sources of future claims. Today’s compliance requirement can become tomorrow’s allegation in a demand letter, lawsuit, document request or deposition. The CARS Act is unlikely to be an exception. Dealer advocacy successfully removed one of the most concerning provisions from the original legislation — an enhanced private right of action that would have made essentially every violation a deceptive practice under the Consumers Legal Remedies Act (CLRA). The enacted CARS Act contains no express private right of action. That is significant, but it does not mean that CARS Act issues will be excluded from litigation. Plaintiffs’ attorneys can be expected to pursue conduct allegedly violating the Act through existing statutes, including California’s Unfair Competition Law (UCL), False Advertising Law (FAL) and, where independently applicable, the CLRA. 19 California New Car Dealer Quarterly
“That Wasn’t the Price I Saw Online” One area likely to receive considerable attention is the CARS Act’s new “Total Price” requirement. When a dealer advertises a specific vehicle, the advertised price generally must be the Total Price at which the dealer will sell that vehicle, subject to the exclusions permitted by law. From a litigation standpoint, the allegation practically writes itself: “The vehicle was advertised online for $32,995. When I got to the dealership, they told me it was actually $34,990 because it already had $1,995 in dealer-installed window tint, wheel locks and door edge guards.” That scenario illustrates why Total Price is likely to receive considerable attention from plaintiffs’ attorneys. Preinstalled products are likely to be a particular area of risk. Dealers commonly install items such as wheel locks, window tint, upgraded wheels, bed liners, running boards, protection packages and other equipment before a vehicle is sold. The CARS Act does not prohibit dealers from selling vehicles with dealer-installed equipment. But if the equipment is installed before the vehicle is advertised or before the dealer’s first written price communication regarding the specific vehicle, its cost generally must be included in the Total Price. The issue ultimately comes down to whether the advertised figure is a price at which the dealership was actually willing to sell that particular vehicle. Suppose a dealership advertises a vehicle for $42,000 but has already installed a $1,995 product on every vehicle of that model, and dealership personnel routinely tell customers that the product cannot be removed. In litigation, plaintiff’s counsel will likely focus on whether the customer could actually purchase that particular vehicle for the advertised $42,000 price, whether the product was already installed when the vehicle was advertised, whether its $1,995 cost was included in the advertised Total Price and whether customers genuinely had the option to decline the product. If the advertised vehicle could not actually be purchased for the advertised price, expect that advertisement to become Exhibit 1 to the complaint. Whether customers genuinely had the option to decline the product could become particularly important. Federal regulators have already shown interest in high “penetration rates” for supposedly optional products. If virtually every customer purchases the same “optional” product, a plaintiff may use that pattern to argue that customers were not being given a meaningful choice. The strongest litigation file will be the one in which the advertisement, the physical configuration of the vehicle, the customer presentation and the sale contract all tell the same story. “They Told Me the Add-On Was Required” Optional products will remain another obvious area for litigation. Service contracts, GAP waivers, theft-deterrent devices and other add-ons already generate consumer claims involving familiar allegations: the customer was told the product was required by the lender, was led to believe the vehicle could not be purchased without it, expressly declined the product but was charged for it anyway, or did not understand that the product carried an additional charge. The CARS Act requires written disclosures regarding optional add-ons and prohibits certain misrepresentations concerning their costs, benefits, limitations and other material terms. It also prohibits charging for an add-on that the customer would not benefit from. Some applications of that prohibition are straightforward. An oil-change product for an electric vehicle presents an obvious problem. So does catalytic-converter marking for a vehicle without a catalytic converter. Other situations will be less obvious. That is where litigation tends to occur. Dealers should expect discovery not only about what the customer signed, but also about how the product was presented, whether the customer was eligible for its benefits, what the dealership’s penetration rate was and whether customers genuinely could decline it. Advertising MSRP or “See Dealer for Details” Is Not Enough Dealers also should be careful about relying on MSRP. Under the CARS Act, MSRP is not a substitute for the dealer’s Total Price for a specific vehicle. Suppose the manufacturer’s suggested retail price is $38,500, but the dealership has already installed $1,485 in required accessories. An advertisement that prominently states only “MSRP $38,500” does not disclose the dealer’s Total Price. The dealership may identify MSRP separately, but it must also provide the actual Total Price. The same principle applies to familiar phrases such as “see dealer for details” or “call for price.” The CARS Act is designed to require the price itself to be communicated, not merely provide a starting point that the customer must visit the dealership to understand. This issue is particularly important because advertisements are no longer confined to a dealership’s own website. Vehicles appear on manufacturer sites, third-party platforms and syndicated listings. Dealers will need to know not merely what price they send to those platforms, but what customers actually see. In future litigation, a dealer may hear: “Our system sent the correct price.” Plaintiff’s counsel may respond: “That isn’t what your customer saw.” The Document Processing Charge Presents a Different Problem The document processing charge (DPC) illustrates how dealers sometimes must navigate overlapping state and federal requirements. Under California law, including the CARS Act, the DPC may be excluded from the vehicle’s advertised Total Price if the required disclosure language is used. The Federal Trade Commission (FTC), however, has taken a more aggressive position. In March 2026, the FTC sent warning letters to 97 dealer groups stating that advertised prices must include mandatory fees and charges 20 California New Car Dealer Quarterly
and may exclude only required government charges. Because the DPC is a dealer-imposed charge rather than a government charge, CNCDA has advised that the more conservative approach is to include the DPC in the advertised price. That position differs from California law, which expressly permits the DPC to be separately disclosed. From a litigation perspective, this is important for another reason. A plaintiff’s attorney challenging an advertisement may not limit the case to the four corners of the CARS Act. Federal advertising principles, the CLRA, the UCL and other theories may also enter the case. A technically defensible interpretation of one statute does not necessarily prevent litigation under another. Rebates Can Still Be Advertised — But They Are Not the Total Price The CARS Act does not prohibit dealers from separately advertising rebates or incentives, but a rebate may not be deducted in calculating the vehicle’s advertised Total Price. For example, assume a vehicle’s Total Price is $30,000, and a $2,000 factory rebate is available. The dealer may separately identify the $2,000 rebate and show a $28,000 “net cost,” assuming existing advertising requirements are satisfied. But the dealer’s Total Price remains $30,000. Conditional rebates create additional risk. A rebate available only to military members, recent college graduates, first responders or another limited group cannot be used to reduce the vehicle’s advertised Total Price as though every customer qualifies. Although a dealer may separately advertise a net price reflecting the rebate, applicable qualifications and limitations must be properly disclosed. From a litigation standpoint, the danger is obvious: “They advertised the vehicle for $28,000, but when I arrived, they told me that price was only available if I qualified for rebates that did not apply to me.” The more conditions necessary to obtain the number prominently displayed in an advertisement, the easier it becomes for a plaintiff to argue that the advertised number was never really the vehicle’s price. The First Email or Text Can Matter Too The Total Price rules do not stop with formal advertisements. The CARS Act also requires disclosure of the Total Price in the dealer’s first written communication with a specific consumer that references either a specific vehicle or a monetary amount or financing term for a specific vehicle. That means an internet lead response, email or text message can become important evidence. Imagine a customer asking: “What’s your best price on the blue Tahoe?” A salesperson responds from a personal cell phone: “We can do $61,500.” If that figure does not meet the Total Price requirements, the issue may have arisen before the customer entered the showroom. This also creates a record-retention issue. The Act requires dealers to retain first written communications for at least two years, even where the consumer never ultimately purchases or leases a vehicle. Dealers should therefore think carefully about employees communicating with customers outside systems that the dealership can preserve and retrieve. The salesperson’s personal text message may seem convenient today. Two years from now, it may be the missing piece of evidence everyone wishes the dealership had retained. The Three-Day Right to Cancel Will Create Entirely New Fact Patterns Beginning Oct. 1, qualifying used vehicles priced at $50,000 or less generally will carry a three-day right to cancel, subject to specific statutory conditions. This will create disputes that California dealers largely have not had to litigate before. Imagine a customer returning on the third day, saying, “I’m canceling the deal.” The dealership believes the customer has driven 425 miles, while the customer contends that the vehicle already had 40 of those miles at delivery, making the mileage recorded at delivery critical. Other disputes may arise over whether the customer attempted to cancel within the three-day period, whether the vehicle was returned with new damage, whether all items provided with the vehicle were returned or how the customer’s trade-in was handled. Even the mechanics of processing the cancellation can create problems. For example, if dealership personnel incorrectly require the customer to pay the restocking fee separately before processing the cancellation, rather than deducting the fee from the refund as generally required by the statute. These are not theoretical compliance questions; they are future factual disputes. The best defense will be contemporaneous documentation: mileage at delivery, the exact cancellation deadline provided to the customer, mileage upon attempted return, photographs of the vehicle’s condition, documentation concerning the trade-in and a written record explaining any legitimate basis for declining the cancellation. The Records May Become the Dealer’s Best Defense The CARS Act requires dealers to create and retain for two years records sufficient to demonstrate compliance. Those records include information concerning Total Price advertising, signed transaction documents and written customer communications, add-on products, cancellation requests and refunds, and certain customer complaints and inquiries. From a litigation perspective, this may be one of the most valuable parts of the Act. A lawsuit filed in 2028 concerning a 2026 transaction may involve a salesperson who has left the dealership and a finance manager who has handled hundreds of transactions since then. The customer may remember the alleged conversation perfectly. The dealership employees may remember nothing. But the records can establish what was advertised, what products were installed, what disclosures 21 California New Car Dealer Quarterly
were provided, what the customer purchased and what happened if the customer later attempted to cancel. Those records effectively become witnesses. No Express Private Right of Action Does Not Mean No Lawsuits Dealer advocacy substantially improved the CARS Act prior to its enactment. Importantly, the final statute does not contain the enhanced private right of action included in earlier versions. However, existing California law already provides plaintiffs’ attorneys with potential avenues to challenge conduct addressed by the Act. One particularly important avenue is California’s 2024 “hidden fees” law, SB 478. Civil Code § 1770(a)(29) amended the CLRA to prohibit advertising, displaying or offering a price for a good or service that does not include all mandatory fees or charges, subject to specified exceptions. Automobile dealers obtained an exemption from that provision, but the exemption applies only when the dealer’s advertisement complies with Vehicle Code § 11713.1(b). See Vehicle Code § 11713.27. California law permits dealers to separately disclose certain specified charges, as reflected in the familiar Vehicle Code § 11713.1(c)(2) advertising disclosure: “Plus government fees and taxes, any finance charges, any dealer document processing charge, any electronic filing charge, and any emission testing charge.” As previously discussed, although California law permits the DPC to be disclosed separately, the more conservative practice, in light of the FTC’s recent position, is to include the DPC in the advertised price. A required dealer-added product, however, is not one of the charges that California law permits a dealer to exclude from the advertised price. That creates an important overlap with the CARS Act’s Total Price requirement. Consider a dealer that advertises a vehicle for $30,000 but has already installed $3,000 in dealer-added products that the customer must purchase. Failing to include those products in the advertised price may implicate not only the CARS Act’s Total Price requirement, but also existing Vehicle Code advertising requirements and the CLRA’s prohibition against hidden mandatory fees. As a result, conduct that violates the CARS Act may also provide the basis for a private consumer claim under existing law, even though the CARS Act itself contains no express private right of action. That is why the Total Price issue may become one of the Act’s greatest litigation risks. Train for the Deposition, Not Just Oct. 1 Much of the work currently occurring at dealerships is understandably directed toward Oct. 1, 2026. Forms need to be ready. Websites need to be updated. Systems need to work. But consider another date: Oct. 1, 2028. Imagine a salesperson, an internet manager or a finance manager sitting for a deposition. Plaintiff’s counsel may ask whether the customer could actually purchase the vehicle for the advertised price, why a preinstalled product was not included in that price, whether the document processing charge was included, and what rebates or incentives were necessary to obtain the price displayed online. The questioning may then turn to whether the customer was told the product was optional, whether the customer could genuinely decline it, and, if the customer attempted to exercise the three-day cancellation right, why the request was rejected. And when counsel asks for the salesperson’s first email or text message to the customer, will the dealership still have it? The strongest answers will come from dealerships whose practices and records consistently answer those questions. Today’s Compliance Issue Is Tomorrow’s Exhibit The CARS Act will create substantial operational changes for California dealers. Inevitably, there will be a learning curve. Plaintiffs’ attorneys will be watching that learning curve. Of all the new requirements, Total Price may deserve the greatest attention. A dealer should be able to answer a simple question about every specific vehicle it advertises: Can any customer actually buy this vehicle at the price we are advertising without being required to purchase anything not already included in that price? If the answer is no, there is a problem worth fixing before Oct. 1. Dealers should likewise pay careful attention to optional products, rebate advertising, written customer communications, cancellation procedures and the records necessary to prove compliance. These are compliance issues today. Beginning Oct. 1, they also become litigation issues. When the CARS Act reaches the courtroom, it will not be enough to say the dealership complied. The question will be: “Can you prove it?” Two years after the transaction, when memories have faded and employees may have moved on, the dealership’s records will provide the best answer. Manning, Leaver, Bruder & Berberich LLP is 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 automobile dealer industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, 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. 22 California New Car Dealer Quarterly
When acquiring a dealership, buyers conduct extensive due diligence, reviewing financials, operations, real estate, customer retention and manufacturer performance. Yet one of the most overlooked opportunities for increasing long-term profitability is retail warranty reimbursement. As dealership acquisition activity continues to accelerate, buyers should prioritize a retail warranty reimbursement review within the first 60 days of ownership. According to the latest Haig Report, 139 dealership rooftops changed hands during the first quarter of 2026 — a 39% increase over the same period in 2025 — with private buyers completing 96% of acquisitions. At the same time, Kerrigan Advisors reports continued strength in dealership buy-sell activity, driven by confidence in the long-term profitability of franchised dealerships. Today’s buyers are asking not only what they’re purchasing, but also what revenue opportunities the previous owner failed to capture. With front-end vehicle margins returning to historical levels, fixed operations has become one of the most valuable drivers of dealership profitability. Warranty reimbursement plays a critical role in that equation because it allows dealers to recover compensation that more accurately reflects their retail labor rates and parts pricing. Unlike increasing vehicle sales or expanding service capacity, improving reimbursement requires no additional customers, technicians, service bays or advertising. Unfortunately, many dealerships delay submitting reimbursement claims or continue operating under outdated labor and parts rates established years ago. Rising technician wages, increasing retail labor rates and changing state statutes often create significant opportunities for new ownership groups to improve reimbursement almost immediately. A comprehensive review should answer several important questions: • When were labor and parts reimbursement rates last updated? • Is the dealership eligible for a new submission? Why Every Dealership Acquisition Should Begin with a Retail Warranty Reimbursement Review BY JORDAN JANKOWSKI Chief Operating Officer, Armatus Dealer Uplift 23 California New Car Dealer Quarterly
• Have retail labor rates increased substantially? • Were previous submissions fully optimized? • Have state law changes created new opportunities? Unlike many operational improvements that require months to produce results, reimbursement optimization can generate higher warranty revenue shortly after approval. Timing matters. Every month a dealership operates under outdated reimbursement rates, it loses revenue that can never be recovered. According to Armatus, dealerships lose an average of $8,000 to $12,000 in gross profit every month when reimbursement improvements are delayed. Improved reimbursement also strengthens fixed operations by supporting technician compensation, training, equipment investments and service absorption. As manufacturers introduce increasingly sophisticated vehicles requiring advanced diagnostics and specialized repairs, recovering appropriate reimbursement becomes even more important to maintaining a profitable service department. Because warranty reimbursement laws, submission requirements, and OEM procedures vary by state and manufacturer, many dealership groups rely on specialists. A company like Armatus can quickly evaluate reimbursement performance after an acquisition, identify unrealized revenue opportunities, and manage the submission process through proven technology and proprietary methodologies. The purchase agreement is only the beginning of value creation. A retail warranty reimbursement review should become a standard post-acquisition best practice, helping new owners uncover hidden revenue, strengthen fixed operations and maximize the return on every dealership acquisition. This article has been edited for length. You can read the full, unabridged version by scanning the QR code. https://www.dealeruplift.com/ the-first-60-days-why-everydealership-acquisition-shouldbegin-with-a-retail-warrantyreimbursement-review/ Jordan Jankowski is the Chief Operating Officer at Armatus Dealer Uplift. He has played a key role in consulting on 25 warranty reimbursement laws nationwide and is widely regarded as a subject-matter expert in this highly technical arena. Jordan manages a team of over 70 people who produce thousands of retail warranty reimbursement submissions each year. RS18001-CarDealerAd-jy04-final3-outlines.indd 1 12/11/18 1:28 PM 24 California New Car Dealer Quarterly
25 California New Car Dealer Quarterly
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California Auto Outlook Comprehensive Information on the California Vehicle Market Released July 2026 Covering Second Quarter 2026 TM Publication Sponsored By: State New Vehicle Registrations Predicted to Remain Above 1.7 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 1.73 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 936,543 864,848 -7.7% 8,171,101 7,938,647 -2.8% Car 247,229 215,757 -12.7% 1,438,309 1,310,814 -8.9% Light Truck 689,314 649,091 -5.8% 6,732,792 6,627,833 -1.6% Domestic 300,365 264,941 -11.8% 3,405,945 3,237,135 -5.0% European 132,754 121,144 -8.7% 799,925 733,973 -8.2% Japanese 407,223 385,389 -5.4% 3,070,711 3,045,891 -0.8% Other Asian 96,201 93,374 -2.9% 894,520 921,648 3.0% Market Share Car 26.4 24.9 -1.5 17.6 16.5 -1.1 Light Truck 73.6 75.1 1.5 82.4 83.5 1.1 Domestic 32.1 30.6 -1.5 41.7 40.8 -0.9 European 14.2 14.0 -0.2 9.8 9.2 -0.6 Japanese 43.4 44.6 1.2 37.6 38.4 0.8 Other Asian 10.3 10.8 0.5 10.9 11.6 0.7 Data sourced from Experian Automotive. Other Asian brands includes Genesis, Hyundai, Kia, and VinFast. 7.0% 4.5% 2.6% -2.7% -9.1% -6.3% 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 2Q '26 vs. 2Q '25 % change vs. year earlier California and U.S New Light Vehicle Registrations Year-to-date 2025 and 2026 thru June State new vehicle market moved lower in first half of this year. California new light vehicle registrations declined 7.7 percent during the first six months of this year versus the same period in 2025. The U.S. market fell 2.8 percent. Market predicted to decline by 3.9 percent in 2026. Statewide new vehicle registrations are predicted to slip to 1.73 million units for all of this year, down 3.9 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 small decline in new vehicle market. Pent-up demand resulting from delayed purchases during the pandemic will place a floor on how low sales can go, while affordability issues continue to keep many prospective purchasers on the sidelines. Relatively high interest rates, elevated vehicle transaction prices, and stagnant real personal incomes have made a new vehicle purchase a stretch for many consumers. These two primary opposing forces should result in the new vehicle market drifting lower, while avoiding a significant decline. ZEV registrations declined in first half of year, but second quarter market share improves. ZEV registrations declined 24.9 percent during the first half of this year versus year earlier, but there were signs that the slide in BEV sales may be subsiding. BEV market share fell from 24.9 percent in 3Q ‘25 (before expiration of the federal government tax credits), to 13.8 percent in the first quarter of this year, but then increased to 17.8 percent in the second quarter. Hybrid vehicle share increased to 22.1 percent in the first half of this year. KEY TRENDS IN NEW VEHICLE MARKET 27 California New Car Dealer Quarterly
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