- The Biden administration failed to enact a planned rule limiting the fees car dealers could add on to a sale
- California, however, may pass its version of the rule, adding the protections in America’s largest car market
In 2023, the Biden administration attempted to pass a nationwide rule limiting the fees car dealers could add to a sale. The effort failed in the courts on a technicality, and many observers believed it could be revived with a new process. However, when the Trump administration took over, it declined to continue the effort.
The idea, however, may not be dead.
A bill moving through California’s state legislature would replicate most of the protections for that state, whose residents buy more cars than the population of any other state.
Dealers Dropping Their Opposition
- The group representing California’s car dealers has said it will not oppose the bill
Even car dealers are getting on board. Industry publication Automotive News reports that the California New Car Dealers Association (CNCDA) “plans to switch its position on Senate Bill 766 from opposition to neutrality.”
CNCDA President Brian Maas told AN the organization “has been working throughout the legislative process to secure language dealers can bear.”
It has now passed in the California state Senate on a 27-9 vote, and passed two committees in the state Assembly. Should it pass there, California Democratic Gov. Gavin Newsom is expected to sign it.
The proposal borrows the name of the failed Federal Trade Commission effort, the Combating Auto Retail Scams (CARS) rule.
Among other things, the measure would require dealers to advertise full prices with all fees included (except for sales tax), honor advertised prices, and clearly disclose that dealer add-ons like paint protection are optional.
It would prohibit so-called “junk fees” — charges for features or services that do not benefit the consumer, such as nitrogen in tires. The measure would also create a 3-day return period for used vehicles purchased through a dealership.
