CNCDA previously sent an alert with information about the 700Credit breach. After discussing the breach more thoroughly with 700Credit, we have the following update to share with our members.
According to 700Credit, it will complete dealer reporting obligations under California law, and additional dealer action should not be necessary. The notices sent by 700Credit will not include dealership names. While this technically does not comply with reporting requirements, the contents of the notices provided by 700Credit to consumers may be viewed as “substantially compliant” by authorities.
Dealers should ask 700Credit for confirmation that it sent the required notices to consumers and the AG, and retain the response in their records.
Dealers seeking to provide their own notices may reach out to 700Credit via their assigned 700Credit representative or by calling the dealer-dedicated hotline at 866-273-0345 for a list of impacted consumers. Before providing their own notices, dealers are encouraged to contact competent counsel.
Some dealers had questions about 700Credit affiliates, such as ID Check and others. 700Credit confirmed that none of its subsidiaries were impacted by the breach.
If you have any questions or wish to discuss this matter further, please do not hesitate to reach out to the CNCDA Legal Team at 916-441-2599 or legalhotline@cncda.org.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
Alert: 700Credit – California Dealer Data Breach Obligations
700Credit has informed dealers that a bad actor obtained unauthorized access to personally identifiable information, including consumer names, addresses, and Social Security numbers.
700Credit will file on behalf of all its client dealers at the FTC, and will notify state AGs on behalf of dealers.
Under California law, each impacted consumer should receive a data breach notification. The format of the notification is identified in Cal. Civil Code section 1798.82.
Under current law, breach notification must be made without unreasonable delay. SB 446 (effective January 1, 2026) makes this more precise – it states that notification to consumers must be made within 30 days, and notification to the AG must be made within 15 days after notification to consumers.
700Credit has indicated that it will be providing data breach notices to state AGs and consumers, unless dealers opt-out. However, it is unclear whether 700Credit’s actions fully satisfy the notification requirements described above.
CNCDA is in communication with 700Credit and is asking them to expeditiously provide California dealers with additional guidance on compliance with California law. Should you have any additional questions, please contact competent counsel or CNCDA’s legal hotline at (916) 441-2599.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
SB 766 (California CARS Act) White Paper
Last updated October 21, 2025
In October 2025, Governor Newsom signed SB 766 (the California CARS Act) into law. Attendees from Dealer Day should note that the version of the bill that the Governor signed into law contains significant improvements from the version discussed during the event.
Even with these favorable changes, SB 766 contains significant new compliance requirements that demand your attention well in advance of the bill’s October 1, 2026, effective date.
These new compliance requirements include:
A three-day right to return on used vehicles less than $50,000.
Advertising requirements on a vehicle’s “total price”.
New consumer disclosure requirements.
A prohibition on the sale of optional products that customers cannot benefit from.
Prohibitions on material misrepresentations to consumers.
New records retention requirements.
To help you comply with this law, CNCDA prepared a white paper on the new law, which is accessible by clicking on the link above.
Alert: Prepare for CDTFA Audits Targeting Out-of-State Sales
Many dealers are reporting to CNCDA that they are facing audits by the California Department of Tax and Fee Administration (CDTFA) targeting out-of-state sales, particularly when they involve sales to LLCs from states like Montana. Dealers selling vehicles out-of-state should anticipate an audit from the CDTFA and document each transaction diligently. Below are resources and recommendations.
General information on what the CDTFA is entitled to review under California law is available in CDTFA’s Publication 34 and in Publication 76 – Audits.
Per Publication 34, dealers should strongly consider completing forms CDTFA-447 and CDTFA-448 for each out-of-state sales transaction.
If visited by a CDTFA auditor, immediately consult competent counsel.
For more information on specific documentation requirements for out-of-state sales and for more resources in the event of an audit, read our article from the CNCDA July Bulletin below.
Dealers can also contact the CNCDA Legal Hotline for additional information.
In what appears to be an increasingly common trend among California agencies, CNCDA has received reports from dealers that the California Department of Tax and Fee Administration (CDTFA) is cracking down on out-of-state vehicle sales that attempt to avoid California sales tax. Below is a summary of available tax-exempt transactions and a more detailed description of out-of-state sales tax exemption requirements.
Absent a valid exemption, sales tax applies to all vehicles sold in California. These exemptions include rare instances such as sales to U.S. government agencies, certain sales to active-duty military, sales of trucks and trailers used exclusively in interstate or foreign commerce, sales of zero-emission transit buses to qualifying purchasers, wholesale sales for resale (with a valid resale permit), and sales of vehicles for use outside California. While most dealers rarely encounter many of these, out-of-state sales are common and often scrutinized.
Sales for use outside California are exempt from state sales tax, but specific procedures and documentation are required to properly conduct and protect the transaction in case of audit. According to Publication 34 on the CDTFA website, to qualify an out-of-state sale for exemption, dealers must prove the vehicle was delivered to the purchaser outside California and that the purchaser did not take possession in-state.
To protect the dealership in the event of an audit, CDTFA recommends notarizing and retaining documentation such as:
Evidence of the purchaser’s out-of-state address, such as utility bills or property tax bills;
If delivery is made by a common carrier, customs broker, or forwarding agent, documents supporting the delivery or shipment (e.g., bills of lading);
If delivery is made by you or your employee:
Expense claims including fuel or hotel receipts, and
A statement signed by the delivery person and the purchaser certifying delivery outside California.
It is strongly recommended that dealers use the CDTFA-448, Statement of Delivery Outside California, to fulfill this requirement. Suppose the purchaser is a California resident, but the vehicle will be used outside the state. In that case, dealers should obtain a CDTFA-447, Statement Pursuant to Section 6247 of the California Sales and Use Law, certifying the customer’s intent. Without this certification, the sale is considered taxable in California. For questions about whether a vehicle delivered out-of-state still triggers use tax, reference CDTFA Publication 52, Vehicles and Vessels: How to Request a Use Tax Clearance for DMV Registration. Additional guidance is available in the CDTFA Tax Guide for Motor Vehicle Dealers and Publication 34.
If you have questions or would like to discuss further, contact CNCDA’s Legal Hotline at legalhotline@cncda.org or 916-441-2599.
Memo on Credit Card Surcharges (Updated 2025)
Over the past few years, we’ve received an increasing number of inquiries from dealers about whether they can impose credit card surcharges at their stores. In 2023, CNCDA commissioned a memo on the topic, which we published on CNCDA Comply. In March 2025, CNCDA commissioned an updated version of the memo to incorporate changes in the law and ongoing compliance issues. In September 2025, the memo was amended to further clarify guidance issued by the California Bureau of Automotive Repair.
Fixed ops (service/parts sales) – credit card surcharges may be imposed, provided that they are clearly and conspicuously disclosed to the consumer prior to consumer authorization on the receipt/invoice and by signage displayed at the cash register.
Installment sales/lease contracts – credit card surcharges occupy a legal grey area, and dealers should closely review the memo’s findings with their counsel to implement an appropriate policy.
Cash sales – credit card surcharges may be imposed, provided that such surcharges are clearly and conspicuously disclosed.
The memo is available on CNCDA Comply by clicking on the link above.
Alert: CNADA Emergency Relief Fund
NADA Relief Fund: Assisting our Southern California Dealers
CNCDA remains committed to informing our dealer members affected by the Southern California wildfires. We also want to offer resources to dealers and associates in other parts of the state looking to help their fellow members.
The NADA Foundation’s Emergency Relief Fund is available to assist dealership employees impacted by the fires. Grants may be provided for damages not covered by insurance or other forms of assistance up to certain limits.
For more information on available relief and to apply, please visit the NADA Foundation website at nada.org/emergency-relief-fund. The application is also located here. Feel free to share this information with affected dealerships. For questions, call NADA at 1(800) 557-6232.
Dealers and associates wishing to support fire victims by donating can visit nadafoundation.org.
We hope this fund can provide much-needed help during this difficult time. Please stay safe and reach out if you have additional questions at (916) 441-2599 or communications@cncda.org.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
Alert: CalOSHA Alert on Wildfires
Protecting Dealership Employees
CNCDA has been monitoring the developing situation in the Pacific Palisades and Southern California generally. Our thoughts are with our Southern California dealers, their employees, and families.
Last night, CalOSHA released an alert regarding protecting employees during wildfires. Dealers fortunate enough to continue operations in the area should remember they are required to protect workers from unhealthy air due to wildfire smoke. It is recommended that dealers monitor the air quality index (AQI) for harmful particles known as PM2.5, evaluate changing job duties or moving work to a location with healthy air where possible, and provide proper respiratory protection, such as N95 respirators as well as training on their use and the health impacts of wildfire smoke.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
Alert: Letter to CDK- Compliance Obligations Arising from CDK DMS Cyberattack
The linked letter was sent on June 25, 2024, to Brian MacDonald, CEO of CDK, regarding Compliance Obligations for California dealers arising from the CDK DMS Cyberattack.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
Alert: Letter to CDK- Compliance Obligations Arising from CDK DMS Cyberattack
The linked letter was sent on June 25, 2024, to Brian MacDonald, CEO of CDK, regarding Compliance Obligations for California dealers arising from the CDK DMS Cyberattack.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
Alert: CDK Update for Members
As Dealerships throughout the nation scramble to react to the interruptions triggered by the reported cyberattack against CDK, we have come to realize just how integrated such services are into our operations. From documenting and accounting for complicated sales and lease transactions, to managing repair orders, and even providing a key interface between the dealerships and manufacturers for time-sensitive parts ordering and replenishment, there are few corners of affected dealerships that have not been affected.
Here are some key factors to bear in mind as you handle employment-law issues incident to these interruptions:
INTERRUPTIONS IN VENDOR SERVICES ARE NOT A VALID EXCUSE FOR FAILING TO MEET PAYROLL REQUIREMENTS – This type of interruption is not an excuse for making timely payroll for your employees. – Employers should make payroll compliance a priority among the broader disruptions. – Manually tabulate hours worked and estimated incentives due and pay on time. – Your Compensation Agreements likely include provisions for adjustments where errors have been made. But those adjustments cannot fix the timing of payments, only correct errors where the figures were not accurately tabulated.
BEAR IN MIND CALIFORNIA REQUIREMENTS FOR WAGES DUE WHEN EMPLOYEES ARE SENT HOME EARLY – If your operations are entirely shut down by the CDK interruption, then the ReportingPay minimum (half of the shift, subject to 2-hour minimum or 4-hour maximum) will not likely apply. – But if operations are merely slowed (either overall or in specific departments), do not rely on the broader crisis as an excuse for paying less than the minimum reporting time pay for those employees who could still be performing work. – Keeping employes at work for half of their scheduled shifts (or paying them for that much) makes this rule a non-issue.
CONSIDER CONTROLLED AND UNCONTROLLED STANDBY REQUIREMENTS – Employees sent home (or told not to report in the morning) who are required to be ready to resume work on short notice should be considered on “Controlled Standby” and are subject to hours worked and minimum compensation requirements. – Make sure that employees not at work are free to engage in personal activities (including potentially leaving the area) during the shutdown and that they are not required to report on less than four hours’ notice. – If you have employees whom you will need more quickly, proactively treat the time as Controlled Standby and consider it hours worked.
We will continue to monitor developments as they happen, as well as evaluating experiences of Association members as they come up with solutions to the many unexpected issues that have and will arise. If your organization has had particular success—or lack thereof—with a workaround, we encourage you to share your experience with the CNCDA to add to the collective knowledge that allows the Association the ability to increasingly serve its members both now and for any future incidents. If you have any questions, please call Fine, Boggs & Perkins LLP at 650.712.8908.
Note that this alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel. If you have more questions, please call CNCDA’s Legal Hotline at (916) 441-2599.
