- Gov. Gavin Newsom vetoed SB 791, blocking dealer processing fee hikes.
- He also signed SB 766, giving used car buyers a longer return window limit.
- Dealers called the veto disappointing, while advocates hailed it as a win.
Cars seem to cost more and more every day, but California buyers are getting a little relief. Back in June, we told you about how dealer fees could have jumped by over 600 percent. Now, not only has Governor Gavin Newsom vetoed that bill, but he’s signed a different one that improves consumer protection for used-car buyers.
Senate Bill 791 originally sought to raise the cap on dealer document processing fees from $70-$85 to up to one percent of a vehicle’s price, capped at $500. Over time, the legislators dropped that cap down to $260. Despite that change, the Governor wouldn’t agree to the bill in the end.
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In his veto message, Newsom said the increase made little sense given that the charge covers only minutes of data entry and that tripling the fee far beyond what an inflation adjustment would justify would unfairly burden consumers already struggling with high costs. “For these reasons, I cannot sign this bill,” he wrote.
Unsurprisingly, California’s powerful dealer lobby isn’t super stoked about the situation. Brian Maas, president of the California New Car Dealers Association, told Cal Matters that sellers were extremely disappointed, noting that the state’s $85 cap is the lowest in the country. He argued that dealers face growing regulatory costs that they cannot recover due to the fixed cap.
If that wasn’t frustrating enough for dealers, Newsom also signed Senate Bill 766 into law, which adds sweeping consumer protection measures.
As of October 1, 2026, used-car buyers across the state will have three days to return the vehicle in question for a full refund, so long as its sale price was below $50,000. Dealers can charge a restocking fee.
SB 766 also bans deceptive add-ons like oil changes for electric vehicles and requires that all costs be clearly disclosed to buyers up front. To that end, advocates say the set of choices is a major win. Rosemary Shahan of Consumers for Auto Reliability and Safety called these moves “huge wins for California car buyers.”