by Rescue from Rising Automotive Costs
Cars seem increasingly expensive, but buyers in California have received some relief. Back in June, there were reports of a potential increase in dealer fees by over 600 percent. However, Governor Gavin Newsom has now not only vetoed this bill but also signed another one that strengthens protections for used car buyers.
Details of Bill SB 791
Senate Bill SB 791 initially proposed raising the limit on dealer document fees from $70–85 to one percent of the vehicle’s price, but no more than $500. Later, legislators lowered this limit to $260. Despite this, the governor ultimately did not support the bill.
Justification for the Veto
In his veto message, Newsom noted that increasing the fees makes no sense, as this charge covers only a few minutes of data entry, and tripling the amount significantly exceeds inflationary adjustments and would create an unfair burden for consumers already facing high costs. He wrote:
For these reasons, I cannot sign this bill.
Dealers’ Reaction
Unsurprisingly, the influential dealer lobby in California is dissatisfied with the situation. Brian Maas, president of the California New Car Dealers Association, stated that sellers are very disappointed, emphasizing that the $85 limit is the lowest in the country. He argued that dealers face rising regulatory costs that they cannot cover due to the fixed limit.
Thank you @CAgovernor for vetoing #SB 791, which would have cost new and used car buyers in #California hundreds of millions of dollars annually through increased dealer ‘document processing fees’. @ErinWitteCFA @chuckbell @consumercal @DoloresHuertaFD @NCLC4consumers @ConsumerReports
New Consumer Protection Measures
If that wasn’t enough to disappoint dealers, Newsom also signed bill SB 766, which implements broad consumer protection measures. Starting October 1, 2026, used car buyers across the state will have three days to return the vehicle for a full refund, provided its cost did not exceed $50,000. Dealers may charge a restocking fee.
Combating Fraud
SB 766 also prohibits deceptive add-on services, such as oil changes for electric vehicles, and requires clear disclosure of all costs to buyers in advance. According to consumer advocates, these changes are a major victory. Rosemary Shahan from the organization ‘Consumers for Auto Reliability and Safety’ called these steps “major achievements for car buyers in California.”
This week @CAgovernor signed SB 766 — the Combating Auto Retail Scams (CARS) Act. The bill is supported by Senator Ben Allen with the participation of Professor Ted Mermin, Senior Fellow Sam Levin, and others. SB 766 strengthens protections for California residents when buying or leasing vehicles.
Summary and Outlook
These legislative changes reflect growing attention to consumer rights in the automotive trade, especially against the backdrop of economic strain. Increased cost transparency and more time for decision-making can help reduce financial risks for buyers. However, dealers are likely to continue advocating for changes that account for their operational costs, which could lead to further legislative discussions in the future.
