What the Rees-Levering Act governs
Civil Code 2981 and the sections after it are the Automobile Sales Finance Act, which dealers call the Rees-Levering Act. It governs the conditional sale contract: a sale of a motor vehicle in which you hand over possession and the buyer pays over time, with title staying with you, or a lien vesting in you, until the price is paid (Civil Code 2981(a)). It reaches vehicles bought for personal or family use, not for business (2981(l)).
A contract that breaks the single-writing rule in 2981.9, or the itemization, finance charge or late charge rules in 2982(a), (j) and (k), is not enforceable by the seller, and unless the violation is corrected the buyer may recover every dollar paid plus a trade-in at the greater of its agreed or market value (Civil Code 2983). Since 2012 a slip on the official fees or the subtotal line costs actual damages only (2983(b)).
One writing, signed, copied, no blanks
Civil Code 2981.9 sets the form. The contract is in writing, in type no smaller than 6-point, and holds in a single document every agreement about the total cost and the terms of payment, promissory notes included. Buyer and seller both sign, or their authorized representatives do. The buyer gets an exact copy the moment both have signed, and the car does not leave the lot until the buyer holds a fully executed copy of the contract or purchase order, with any purchase proposal or credit statement the buyer signed. You never take a signature on a contract with blanks.
Three more signatures live beside the contract: the buyer acknowledges the 8-point bold complaint notice, which also says financing and payment terms cannot change after signing without the buyer's written agreement (2982(h)), signs or initials the insurance notice printed in red 8-point bold type (2984.1), and signs the add-on disclosure below (2982.2).
All costs and terms of payment
Civil Code 2982 requires the Regulation Z disclosures whether or not Regulation Z applies, then adds California's own. The finance charge, APR and payments are the next two lessons. This lesson covers the "itemization of the amount financed", which 2982(a) requires in this order (SB 766 re-enacted the section on October 1, 2026):
- The cash price, then a line each for the document processing charge, the smog certification fee, a theft deterrent device, a surface protection product, an EV charging station, sales tax, the electronic registration charge, a service contract, the prior credit or lease balance on the trade-in, and a debt cancellation agreement or GAP waiver, summed as the total cash price.
- Amounts paid to public officials: license, registration, transfer and titling fees, and the California tire fee.
- Insurance premiums written into the contract, and the state smog certificate fee.
- A subtotal.
- The down payment: the trade-in's agreed value, its payoff, the net (negative if the payoff is larger), any deferred down payment due by the second installment with no finance charge, any manufacturer rebate, the cash, and the total. A negative total shows as zero and the shortfall moves up to the prior credit balance line.
- Any prepaid finance charge, then the amount financed: the subtotal less the down payment and the prepaid finance charge.
The same section has a document processing or electronic registration charge disclosed as not a governmental fee (2982(n)), bars any application fee (2982(o)), and puts "new" or "used" inside a red box at least half an inch on a side (2982(q)). The old line for a contract cancellation option charge went out with the option.
Add-on items on their own page
Before the buyer signs the contract, you hand over and get a signature on a separate document, in type of 10 points or more, listing each add-on with its price: a service contract, an insurance product, a debt cancellation agreement or GAP waiver, a theft deterrent device and a surface protection product. Under them sit the total and two payment figures, "Installment Payment EXCLUDING Listed Items" and "Installment Payment INCLUDING Listed Items" (Civil Code 2982.2). Motorcycles and off-highway vehicles are exempt.
Vehicle Code 11713.19 adds two prohibitions: once terms are negotiated you may not add a charge for any good or service without disclosing it and getting consent, and you may not inflate a payment or down payment or stretch the term to hide what an add-on costs. Since October 1, 2026 the California Combating Auto Retail Scams Act, the CARS Act, goes further: any written statement about an add-on during negotiation says at least once, in writing, that the add-on is not required (Civil Code 1784.41(b)); and you may not charge for an add-on that cannot benefit the buyer, such as oil changes on an electric vehicle (1784.42(a)).
The credit score notice
If you pull a credit score to arrange financing on a consumer's application, you give the applicant before the sale a separate document in 10-point type or larger: each score used, the model's range, where the score sits among other consumers, its date, the agency that supplied it, and the section's statements on what a report and a score are and the right to a free report (Vehicle Code 11713.20). The FTC's model form satisfies it (11713.20(b)), today Model Form A-4 in 16 CFR part 698, paired with the same list in 16 CFR 640.5(e).
The two-day option, and what replaced it
The Car Buyer's Bill of Rights put a cancellation right on used cars in Vehicle Code 11713.21: a contract cancellation option the buyer paid for, offered on every retail sale of a used vehicle under $40,000. That section repealed itself on October 1, 2026, the day the CARS Act, SB 766 of 2025, took effect (Vehicle Code 11713.21(i); Civil Code 1784.28). A sale closed before that date keeps the option; a sale since carries the three-day right to cancel in Civil Code 1784.43. Side by side:
| Term | Option, before October 1, 2026 (Vehicle Code 11713.21) | Right to cancel, since (Civil Code 1784.31 and 1784.43) |
|---|---|---|
| Covered sale | Retail sale of a used vehicle under $40,000 for personal use; not motorcycles or RVs | Retail sale or lease of a used vehicle at $50,000 or less; not motorcycles, wholesale, fleet or commercial buyers, vehicles of 10,000 pounds GVWR or more, auction sales, or a lessee buying the car in hand |
| Cost to the buyer | Up to $75 on a cash price of $5,000 or less, $150 up to $10,000, $250 up to $30,000, and 1 percent of the price above $30,000 | Nothing |
| Time to cancel | No earlier than your close of business on the second day after delivery | Three calendar days from the day after signing, ending at close of business; a day you are closed pushes it to the next open day |
| Miles allowed | At least 250, as the agreement set | 400 |
| Restocking fee | Up to $175, $350 or $500 by cash price, the option price credited against it | 1.5 percent of the sale price, no less than $200 and no more than $600, or your actual shipping cost up to that; plus $1 a mile over 250 miles, capped at $150; deducted from the refund |
| Refund due | Within two days of cancellation | Within 48 hours, or two business days after a check or similar payment is verified |
| Trade-in | Held until the option expired if the buyer paid for it | Returned with its keys, or if sold or its transfer begun, the greater of agreed value, your sale price or fair market value, less its payoff, with an itemized receipt |
| Paper | A separate option agreement with a signable cancellation statement in duplicate | A separate disclosure titled "3-Day Right to Cancel Used Car Purchase or Lease", and a notice on page one of the contract |
The disclosure states the return conditions (1784.43(b)). The buyer personally delivers, during business hours, the vehicle free of any lien but the sale's own, in the condition it left in apart from reasonable wear and any defect that surfaced afterward through no fault of the buyer, with any items that came with the deal. Keep written documentation of damage beyond reasonable wear: claiming damage without a reasonable basis is a violation, as is impeding the cancellation, overcharging the fee, holding the down payment or trade-in, or saying the person who can refund is out (1784.43(c)).
Two notices carry the right. The first page of every purchase or lease agreement states, in the words of 1784.43(e), that California has no cooling-off period for new vehicles but a used vehicle bought or leased for $50,000 or less may be cancelled within 3 days for any reason, a restocking fee possible, and points to the disclosure. The same message in 36-point type is posted in every sales office, cubicle and contract room, with a line on motorcycles and off-highway vehicles where you sell those (Vehicle Code 11709.2, re-enacted by SB 766). The buyer cannot waive the right (1784.21), you may offer a longer or cheaper one (1784.43(j)), and every cancellation request, refund and trade-in return is kept two years (1784.44).
Cash sales
A cash sale is not a conditional sale. That term needs title or a lien held back until a later payment (2981(a)), so no section of the Code puts a cash buyer on a Rees-Levering contract or gives one an itemization of an amount financed. The sale is still a written one. What the Car Buyer's Bill of Rights added, and now the CARS Act, attaches to the retail sale itself, cash or financed: the three-day right covers any retail sale or lease at $50,000 or less (1784.43(a)), the cooling-off notice goes on the first page of "the purchase or lease agreement" (1784.43(e)), 11713.19 bars added charges on any vehicle sale contract, and every purchase order a buyer signs is kept two years (1784.44(a)(2)). A cash sale with no written agreement has nowhere to put the notice.
Autobroker sales, delivery and the return
Arranging a consumer's purchase from another dealer is brokering, done only with an autobroker endorsement and the DMV's autobroker log (Vehicle Code 11735(a), (b)). Before the consumer signs any purchase agreement or pays $100 or more, the broker signs a written brokering agreement, in the form 11738 prescribes, and gives a completed copy to the consumer and to the selling dealer (11736(a)). A deposit may not exceed 2.5 percent of the selling price and is refundable on demand until the consumer signs with the selling dealer and takes delivery (11736(b), (c)).
Delivery can pass through the broker: with the selling dealer's written approval, the broker may deliver the car and obtain the consumer's signature on the selling dealer's purchase agreement, already executed by that dealer (11735(d)). The sale stays the selling dealer's, and so does the three-day right: 1784.43 puts it on the dealer who sells or leases and names "the selling or leasing dealer" as the one the car goes back to (1784.43(a), (b)(1), (6)), and a broker is never the seller in the same deal (11736(e)). A broker who delivers the car hands over the selling dealer's disclosure with it, because the three days start the day after signing, not the day the car arrives (1784.31(i)).
Sources
- Civil Code 2981, 2981.9, 2982 (as re-enacted by SB 766, operative October 1, 2026), 2982.2, 2983 and 2984.1, the Automobile Sales Finance Act, read 2026-10-22.
- Civil Code 1784.20 to 1784.44, the California Combating Auto Retail Scams Act (SB 766, Stats. 2025, ch. 354), read 2026-10-22 in the chaptered bill text and on the code.
- Vehicle Code 11713.19, 11713.20 and 11713.21 (repealed October 1, 2026), the Car Buyer's Bill of Rights sections, read 2026-10-22.
- 16 CFR 640.5(e) and part 698, appendix A (Model Form A-4), the FTC's credit score disclosure for motor vehicle dealers, read 2026-10-22.
- Vehicle Code 11709.2, as re-enacted by SB 766, read 2026-10-22 in the chaptered bill text.
- Vehicle Code 11735, 11736 and 11738, autobrokers, read 2026-10-22.
- DMV industry memo OLIN 2026-10, Implementation of CARS Act (SB 766), read 2026-10-22.
- DMV, Lesson Plan Guidelines for Used Vehicle Dealer Education Programs, OL 2000 (rev. 12/2007).