California CARS Rule (3-Day Right to Return) Quick Reference Guide

This document does not constitute legal advice and is for educational purposes only.

The CA CARS Rule (SB-766) goes into effect on October 1st, 2026. To provide our California dealers with the tools to comply with this new regulation we will be making the following updates to DeskManager Online:

With the adoption of this new law, you will not longer be able to charge a Contract Cancellation fee.  

If you have a pending deal from any date before 10/1/26 and the sale date is pushed past the implementation date for CA CARS Rule, we display the following warning:

If the Contract Cancellation ‘Apply’ checkbox is unchecked, we will show another message notifying you that the Contract Cancellation fee is not applied to this deal:
 
*NOTE: Removing the Contract Cancellation Fee from the sale will remove the warning message. After 10/1/26, the Contract Cancellation fee and its submenu will no longer be available for use in DeskManager Online.

What do I do if a customer wants to exercise their right to return the vehicle they purchased?

In any deal that is not wholesale > go to the Active customer account > click ‘More’ in the command bar > then click Close Account

The ‘Close Account’ dialogue will appear, under ‘Reason’ > Select ‘Contract Cancelled’ 
 
 

Once Contract Cancelled is selected, you will see the updated Contract Cancellation/Right to Return screen. 

Make sure the information on this screen is accurate and indicate whether the vehicle was returned to you and the mileage on the vehicle at the time of return. You have the option to automatically create a refund transaction from this screen. If you would prefer to process the refund manually, you may uncheck the “Create Refund Transaction” option at the bottom center of your screen.

What happens if a customer’s trade is sold and they still want to exercise their right to return their vehicle?

If you processed the sale of the trade in your DMO software, we will automatically detect it and adjust the Contract Cancellation screen accordingly. 
 
At this time the system will calculate the trade refund amount by comparing the Trade Credit, the Sales Price of the trade and the Trade Fair Market Value(KBB or JD power provided value). DeskManager Online will select the highest of these amounts and apply it to the Refund to Customer amount.

If a trade is being returned to a customer, the dealer has one more chance to determine how that returned trade is handled in the software.

Summary of changes to DeskManager Online

• Revisions to the Contract Cancelled option under our ‘Close Account’ menu include:
  • The ability to determine the last date the vehicle is eligible for return under the CA CARS Rule, 
  • The ability to calculate and assess restocking/return fee of 1.5% of the vehicle price (minimum of $200, maximum of $600),
  • The ability to calculate and assess a mileage fee if a customer has driven the vehicle more than 250 miles during the three-day period (capped at $150), 
  • Total appliable restocking fee could be $600 Base fee+ $150 Mileage fee = $750 grand total, the fee will not be allowed to go any higher than this amount nor the computed total amount DeskManager Online has generated whichever is lower
  • The ability to calculate the refund due to the customer (less applicable restocking or mileage fees) at the time of return
  • The ability to calculate the value of trade-ins sold during the 3-Day Right to Cancel in accordance with California law.
• Vehicles that have been sold from a dealer’s inventory will no longer be included in inventory uploads within 48 hours of the sale
• Updated versions of Reynolds & Reynolds licensed forms (LAW and Bankers Systems) will be available to print in DeskManager Online as of October 1st, 2026. 

Are there new forms available in CA to help comply with the CA CARS Rule?

BPI Forms are coming soon!

Our legacy software, DM11, will not be updated with these new tools and features. We highly recommend that California dealers using DM11 migrate to DeskManager Online so they have the new tools necessary to comply with the CA CARS Rule. However, new ePay forms are available to DM11 dealers without an additional charge.

Please note, the CA CARS Rule gives a customer the Right to Return a vehicle under the following conditions:

• The vehicle is returned within the 3-day right to return period,
• The vehicle price is $50,000 or less, 
• The vehicle qualifies as a used vehicle under section 665 of the California Vehicle Code, and
• The vehicle has not been driven over 400 miles between the execution of the sales contract and the return of the vehicle.

NOTE: The CA CARS Rule allows dealers to process returns even if the vehicle sold does not officially qualify for a return.  
Cars Rule verbiage on-line J:
“This section shall not be construed to limit the ability of a dealer to offer a right to cancel that provides greater consumer protections than those outlined in this section, including a right to cancel for additional vehicles, a longer return period, or reduced restocking fees.”