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 14
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