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
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