California dealers should be aware of current regulatory developments affecting automotive sales practices.
Consumer attorneys in California are pursuing claims related to advertising, pricing, and add-on products. The California DMV maintains enforcement on similar issues. SB 766 (CARS Act), effective October 1, 2026, addresses these practices. Additionally, the Federal Trade Commission (FTC) has issued guidance nationwide.
On March 13, the FTC issued warning letters to 97 dealerships regarding alleged violations of Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices (UDAP).
These letters were based on consumer complaints and indicate regulatory focus on pricing transparency and sales practices.
Examples of practices the FTC has identified include:
- Advertising prices that exclude required dealer fees
- Misrepresenting financing terms or optional products
- Adding products without clear consent or proper disclosure
- Presenting add-ons as required when they are optional
- Charging for items without adequate disclosure
The FTC’s position is that required fees must be included in advertised total prices.
California’s SB 766 addresses similar areas:
- Total price consistency across advertisements and contracts
- Optional products must provide consumer benefit
- Dealers must maintain records for at least two years
- Misrepresentation includes omissions and inconsistencies
Dealerships may face regulatory scrutiny based on advertising, documentation, and sales practices.
For questions about compliance requirements, dealers should consult with qualified legal counsel.
