Governor Gavin Newsom has vetoed Senate Bill 791, which would have allowed California car dealers to increase fees for processing Department of Motor Vehicles paperwork. The bill proposed raising the current $85 cap to up to 1% of the vehicle’s purchase price, capped at $260. Newsom announced his decision on Monday, stating that the fee hike was unreasonable as it would charge buyers for “only minutes of data entry.”
In his veto message, Newsom emphasized that the increase would triple the existing fee, far exceeding what inflation adjustments would justify, especially during a time when Californians are grappling with high living costs. Brian Maas, president of the California New Car Dealers Association, expressed disappointment, noting that the current fee is the lowest in the country. He argued that the increase would have still kept California’s fees in the bottom quartile nationally.
The veto comes amid new regulations signed by Newsom aimed at enhancing consumer protections in car sales. The California Combating Auto Retail Scams (CARS) Act, a separate law, introduces measures like a three-day return policy for used cars under $50,000 and prohibits dealers from charging for unnecessary add-ons. This law will take effect on October 1, 2026.
The bill’s author, San Jose Democratic Senator Dave Cortese, had reduced the proposed fee from an initial $500 to $260 after legislative debate. He argued that the fee was necessary to cover the costs of processing extensive documentation required by state regulations. Despite the veto, the CARS Act, which focuses on transparency and consumer rights, marks a significant shift in California’s auto retail landscape.
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