ALERT: FTC Confirms Document Processing Charge Must Be Included in Advertised Price
(4.20.26, SACRAMENTO, CA) On Friday, April 17, 2026, FTC Chair Andrew Ferguson and Bureau of Consumer Protection Director Chris Mufarrige confirmed the Federal Trade Commission’s (FTC) position on dealer advertising during a webinar hosted by NADA. This alert supplements CNCDA’s March 26, 2026, alerton this topic.
Bottom line for California dealers:
Include the Document Processing Charge (DPC) in your advertised price. The most prominent price in every ad must be the all-in, out-the-door price. Only true government charges (e.g., sales tax) may be excluded.
Avoid double-charging the DPC. If the DPC is built into the advertised price, take care that it is not also charged separately on the line item for the DPC on the retail installment sales contract or other documentation.
Update your California disclosures. If your advertised price now includes the DPC, your existing disclosure language should be reviewed and revised to reflect that change. Continuing to use the unmodified Vehicle Code § 11713.1 disclosure (stating that the DPC is separate) alongside a DPC-inclusive price may be misleading.
Avoid MSRP-only pricing. Like the CARS Act, your most prominent price must be your asking price for the vehicle (i.e., your “total price” under the CARS Act). You may not advertise MSRP alone to avoid this requirement.
Stay focused on the CARS Act. Most of the FTC’s other advertising expectations are already required under California law, and CARS Act compliance by October 1, 2026, remains your most significant near-term obligation.
What the FTC said:
During the webinar, the FTC publicly confirmed that the DPC must be included in the advertised price and that the FTC sees no conflict between state doc fee statutes and this federal compliance expectation. The FTC further stated that it intends to aggressively pursue enforcement against non-compliant dealers.
The FTC stated it will issue written FAQs addressing dealer advertising compliance soon. The FAQ should address multiple vehicle advertising topics, including the DPC. CNCDA will review those FAQs when published and will update members with any further guidance as warranted.
This alert is intended for educational purposes only and is not legal advice. If you require legal advice, contact competent counsel.
ALERT: Dealer Parts Counters Selling Embedded-Battery Products Must Register with CDTFA and Collect New Fee
(4.17.26, SACRAMENTO, CA) The California Department of Tax and Fee Administration (CDTFA) has confirmed with CNCDA that dealers selling “covered battery-embedded products” (CBEP) retail over the parts countermust register with the CDTFA and remit the fee for qualifying products. CBEPs are essentially products that contain hard-to-replace batteries.
Critically, the new requirement only applies to dealership parts counter operations. Dealership vehicle sales and service operations are exempt. For example, a Bosch or Duralast TPMS sensor installed by a dealer technician during a tire service falls within the vehicle exemption, but the same sensor sold as a boxed part to a customer over the parts counter is subject to the fee.
Dealers currently selling qualifying products retail over the parts counter must register and begin remitting the fee by no later than April 30, 2026. Dealers can register for a CBEP Waste Recycling Fee account at the CDTFA Online Servicespage.
How do I know if I’m selling a CBEP?
It is the product manufacturer’s responsibility to identify whether a product is a CBEP. CalRecycle maintains a list of qualifying products on its website here. A summary of the current list appears at the end of this alert.
Notably, no franchised manufacturer appears on CalRecycle’s current list. Dealers should not interpret this absence as an exemption. CalRecycle has made clear that absence from the list does not relieve a retailer’s obligation to collect the covered battery-embedded waste recycling fee. Dealers selling OEM parts/accessories containing hard-to-replace batteries should confirm fee applicability with their manufacturer representative.
Manufacturers bear the responsibility to notify dealers of CBEP-qualifying products. However, dealers should audit their parts inventory and be prepared to implement fee collection promptly upon manufacturer notification.
Why am I hearing about this now?
SB 1215 (2022) created a new category of electronic waste called the “covered battery-embedded product” (CBEP), defined as a product containing a battery that is not designed to be easily removed with common household tools. Due to CNCDA advocacy, vehicles and vehicle component parts, including replacement parts, have an exemption elsewhere in the amended law, and stakeholders (including OEMs) believed the automotive parts exemption generally applied to CBEPs. This was not entirely correct — parts sold retail over the counter were not exempt from the scope of the bill.
The CBEP fee became effective on January 1, 2026, and several independent parts manufacturers have reported that automotive parts contain CBEPs (see list below). Over the last few weeks, CNCDA has been receiving reports from dealers about CDTFA officials specifically asking about TPMS sensors sold over the parts counter. This prompted CNCDA to seek clarification from the CDTFA on the topic.
CNCDA worked to obtain written guidance from CDTFA indicating that under 14 CCR § 18660.5, vehicles are exempt from the definition of CBEPs. Further, CDTFA interprets this exemption to apply to any replacement vehicle part or component installed onto the vehicle by the dealer (i.e., parts installed in the service drive). However, qualifying CBEP products sold retail over the parts countertrigger obligations under the law.
What products are currently listed as containing CBEPs?
As of the date of this alert, the most recent information on CalRecycle’s website is dated April 6. Examples of CBEPs in automotive parts include:
Body shop inventory management hardware (3M RepairStack)
As noted above, CalRecycle maintains a list of qualifying products on its website here. This list will change in the future and is not dispositive. If you have questions about whether a specific part qualifies, contact the part manufacturer.
Should you have any questions, feel free to reach out to the CNCDA Legal Team at 916-441-2599 or legalhotline@cncda.org.
ALERT: Dealer Advertising and the Document Processing Charge
(3.26.26, SACRAMENTO, CA) Recent FTC warning letters and enforcement actions against dealers have created confusion on the advertisement of a vehicle’s total price and the document processing charge (DPC). This alert is designed to answer California dealer questions on this issue.
What happened?
On March 13, 2026, the FTC sent warning letters to 97 dealers nationwide stating that advertised prices must include all mandatory fees and that only “required government charges, like taxes” may be excluded. The letters rely on Section 5 of the FTC Act and do not reference any specific rule, nor do they mention the DPC specifically. That said, CNCDA has been informed that the FTC is taking the position that the DPC must be included in the advertised price because it is a dealer-imposed fee rather than a government charge.
This position conflicts with California Vehicle Code Section 11713.1, which expressly permits dealers to exclude the document processing charge from the advertised price, and with the California CARS Act (SB 766), which the Governor signed into law last year and which continues to treat the document processing charge as a separately disclosed item excluded from the vehicle’s total price. The CARS Act was itself California’s legislative response to the FTC’s federal Vehicle Shopping Rule, which the Fifth Circuit Court of Appeals vacated in January 2025 before it ever took effect.
What should California dealers do?
California dealers have two options.
First, continue to follow California law. Under this approach, you exclude the DPC from the advertised price and make sure your ads include the required disclosure language — the full “Plus government fees and taxes, any finance charges, any dealer document processing charge, any electronic filing charge, and any emission testing charge” statement with no abbreviations.
Second, include the DPC in the advertised price. This is the more conservative approach that aligns with the FTC’s position. And California law does not prohibit this.
Even though the second option is the most conservative approach, excluding the DPC with proper disclosure remains very defensible. Just last year, California reaffirmed (through the CARS Act) that dealers can continue to exclude the DPC from the advertised price. Moreover, the FTC has not issued any legally enforceable rule on this topic. That said, FTC staff appears committed to the position that dealers nationwide must include the DPC in their advertised prices.
Dealers should also note that the situation is evolving. NADA is hosting a webinar on April 6 at 10 a.m., which will include FTC staff (learn more by clicking here). The FTC may also issue a written FAQ on the topic. CNCDA is actively monitoring the FTC’s position on this issue and will update its guidance to dealers as circumstances warrant.
Regardless, California dealers should remain focused on compliance with the CARS Act, which is effective on October 1, 2026. Earlier this month, CNCDA held a CARS Act Webinar with ComplyAuto, available here. In June, CNCDA will host a webinar with Reynolds and Reynolds on their new forms which are designed to help dealers comply with the law. This summer, CNCDA will also publish more detailed written guidance that incorporates these new forms. CNCDA’s 2025 Legislative Summary also discusses the CARS Act, accessible here.
Should you have any questions about this topic, do not hesitate to contact our legal hotline at 916-441-2599 or legalhotline@cncda.org.
Alert: 700Credit Breach Dealer Update
Dear CNCDA Member,
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.
