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California dealers have received an increasing number of legal solicitations built around a simple message: your dealership could be sued, and you should pay for protection before it happens.

Recently, dealers have even received private solicitations offering ongoing legal representation based on a per-vehicle charge, with the promise of predictable legal costs if a claim later arises.

It is easy to understand why this approach gets a dealer's attention. Nobody wants an unexpected demand letter, arbitration, or lawsuit. Legal bills can be expensive, and even a dealer who believes a transaction was handled properly can find itself having to spend time and money defending that position.

But there is another way to look at the problem.

Don't build your business around the fear of being sued

No attorney program, insurance policy, software system, or monthly legal subscription can guarantee that a dealership will never receive a claim.

And paying someone after the fact to defend a transaction does not change what happened when the vehicle was sold.

The strongest position a dealer can have is a transaction that was handled properly from the beginning, with the required disclosures, documents, approvals, signatures, calculations and supporting records properly completed and preserved.

That means having good procedures and actually following them.

Your system should help you do things right

This is one of the reasons ASN has always emphasized using the system's guides, required fields, forms, disclosures, warnings and other built-in processes as part of the dealership's daily operating procedures.

The objective isn't simply to produce paperwork.

It is to help the dealership establish a consistent process:

• Use the appropriate forms and disclosures.
• Follow the system's transaction workflow.
• Make sure required information is entered completely and accurately.
• Review documents before the customer leaves.
• Obtain the required signatures and acknowledgments.
• Keep supporting documentation.
• Follow established procedures consistently, even when the dealership is busy.
• Train employees so the process does not depend on one person's memory.
• Use the system's available reports, history and documentation to help review transactions when questions arise.

When a dealership consistently follows good procedures, it has something much more valuable than a promise that someone will defend it later: a documented history of how the transaction was actually handled.

There is no substitute for good business practices

ASN cannot promise that a dealer will never be contacted by an attorney or receive a claim. No software company can honestly make that promise.

What ASN can do is continue providing tools and system guidance designed to help dealers conduct and document their business properly.

That distinction is important.

The goal should not be to prepare for a lawsuit by paying someone who says they understand how lawsuits against dealers work. The goal should be to operate the dealership in a way that reduces the opportunity for a legitimate complaint in the first place, and to have good documentation when questions do arise.

Don't let fear become another cost of doing business

Legal solicitations often focus on the uncertainty surrounding litigation: Which transaction will generate a complaint? How much will it cost? What if the dealer did everything right?

Those are legitimate concerns.

But the answer should not be to assume that every dealer needs another recurring expense simply because someone has identified a way to monetize that concern.

Dealers should first look at their own operation:

Are we following our procedures?
Are our employees using the tools available to them?
Are required disclosures and documents being completed?
Are transactions properly documented?
Can we reconstruct what happened if a customer raises a question months later?

If the answer to those questions is yes, the dealership has already taken the most important step toward protecting itself.

Good practices are your first line of defense.

Use your DMS.
Follow the guides.
Complete the required documentation.
Train your staff.
Review your processes.
Keep your records.

And when a legal question actually arises, obtain advice from qualified counsel who can evaluate your specific facts and circumstances.

Don't operate your dealership around the fear of who might sue you. Operate it around doing things right.

ASN Reminder: ASN provides software and system tools to help dealerships manage their day-to-day operations. System features are not a substitute for legal advice, dealership policies, employee training, or compliance responsibilities. Dealers should use the available system guides and features as part of their established business practices and consult qualified counsel regarding specific legal questions.

Key Takeaways: 

• New car prices reached $50,900 in spring 2026 — a 3.3% increase since December — widening the new-to-used price gap to $21,000 and driving buyers firmly into the used market.
• Used hybrid sales are up 34% year-to-date in 2026, with average list prices hitting an all-time high of $38,800 as fuel price volatility accelerates demand for fuel-efficient vehicles.
• The average U.S. light vehicle is approaching 13 years old, and rising import duties averaging $3,700 per vehicle are compounding affordability issues across the market.

Halfway through 2026, the U.S. automotive market appears to have found its “new normal” — the $50,000 car. Prices have reset, buyer behavior is adapting, and the used market is absorbing the pressure in ways that dealers can no longer ignore.

Why Have New Car Prices Climbed Above $50,000 in 2026?

This spring, the average new car list price reached $50,900, up 3.3% since December, according to the CarGurus Mid-Year Intelligence Report. Used car prices crossed $30,000 at the same time — levels not seen since the supply disruptions and chip shortages of 2021.

New vehicle sales have not kept pace with population growth. The U.S. sold 17.3 million new vehicles in 2000 and only 16.3 million in 2025 — a decline of nearly 5 million units annually when adjusted for population. Manufacturers have responded by prioritizing profit, concentrating inventory at higher price points. Today, new inventory priced above $50,000 exceeds that priced below $35,000. It has been that way for a few years now.

The gap between new and used average list prices has widened from $13,000 in 2015 to $21,000 in 2026. New monthly payments now run roughly $180 per month above used, and nearly a third of new inventory carries an estimated payment above $1,000 per month.

What Do Aging U.S. Vehicles Mean for Used Car Buyers and Dealers?

The U.S. light vehicle fleet is now approaching an average age of 13 years — up four years since 2000 — with 289 million vehicles in operation, according to S&P Global Mobility data and CarGurus. Buyers who cannot afford new are holding on longer or moving further down the price ladder.

The share of used sales from 7- to 10-year-old vehicles is up from 17% in 2020 to 23% in mid-2026. Sales of vehicles with 60,000 to 150,000 miles are up 16% from 2020. The most in-demand high-mileage models, Ford F-150, Chevrolet Silverado 1500 and RAM 1500, are all averaging around $20,000 even with more than 120,000 miles.

Why Are Used Hybrid and EV Sales Rising So Fast in 2026?

Ongoing instability in global oil supply has kept gas prices elevated through much of 2026, and consumers have responded. Used hybrid sales are up 34% year-to-date. Average list prices was at an all-time high of $38,800 in mid-June — an 8.5% increase from early March, per CarGurus. Top-performing models include the Toyota Camry (up 306% in sales), Honda CR-V Hybrid (up 78%) and Jeep Wrangler 4xe (up 68%).

Used EV sales are growing too, concentrated around affordability. The top-selling models — Hyundai Ioniq 5, Chevrolet Equinox EV and Tesla Model Y — are priced between $25,000 and $31,000. A wave of off-lease EVs is expected to enter the market in the second half of the year, a likely supply boost that dealers should prepare for now.

How Are Import Tariffs Reshaping Automotive Pricing in 2026?

Import duties have risen sharply. The average duty on an imported vehicle jumped from roughly $360 in 2024 to approximately $3,700 in 2026. The impact is about $3,100 from South Korea and Mexico, $6,700 from the EU, and a whopping $13,200 from China.

What Should Car Buyers and Dealers Expect in the Second Half of 2026?

The remainder of 2026 depends on some key variables. CarGurus identified a few of them in their report.

First, gas prices drove powertrain demand through the first half of the year; where they go next will determine whether hybrid and EV momentum holds. Rising inflation concerns are also shifting Federal Reserve discussions from rate cuts to potential hikes, which would add greater strain to consumer affordability.

Consumer sentiment sits near record lows — yet vehicle sales have held relatively steady. In some places vehicles are still flying off the lots. But for how much longer can those numbers last? When will how everyone feels about the current price of a new vehicle be represented by the actual sales of new vehicles?

How long that gap persists is the central question facing dealers as they head into the back half of the year.

Souce: Digitaldealer

The Federal Trade Commission issued a consumer alert on Tuesday related to fraudulent online dealership listings, which Point Predictive chief fraud strategist Frank McKenna described in vivid detail more than a year ago.

The FTC described a similar strategy that McKenna mentioned, with officials saying in their alert, “Scammers set up bogus car dealership websites to trick you into paying up front for a car you’ll never lay hands on.

“They clone a real auto dealer’s website — often using AI to do so — copying the brand logos, vehicle listings, and photos down to the last detail. Some websites even include fake customer testimonials,” the FTC continued.

In this industry commentary about these phantom dealerships, McKenna explained how fraudsters use details from well-known dealership service providers to dupe consumers.

“The scam starts when criminals create a website or social media profile claiming to be a legitimate dealership. After they make the website, they steal legitimate listings from other dealerships or create new ones using stock photos,” McKenna wrote.

“Sometimes, those vehicle listings are scraped from legitimate platforms like Carfax and Autotrader, with prices set deliberately below market value — typically 10-30% lower to create urgency while remaining believable,” he continued.

“To make the scam more believable, the fraudsters will add false verification elements like fake Trustpilot ratings and fabricated customer reviews. Those reviews make the website even more authentic and are often undetectable to the human eye,” McKenna added.

And now the money part comes into play.

“Once an interested buyer is on the hook, scammers will employ high-pressure tactics, claiming other buyers are interested and pushing for wire transfers or cryptocurrency payments,” McKenna wrote.

“Once payment is received, however, all contact is severed, and the websites often vanish within days,” he went on to say.

With so much of the car business happening online nowadays, the FTC suggested that consumers take an old-school, in-person approach.

“Keep in mind that if the scammers are impersonating a real dealership, you might find glowing reviews. So go the extra mile — ask to see the car, and the dealership, in person. If they won’t let you, pump the brakes,” the FTC said in its alert.

“If the car is too far for you to visit in person, tell the dealer you want to hire a mobile inspection service to check out the car. If they won’t let you, consider taking your business somewhere else,” the FTC went on to say.

Souce: Auto Remarketing 

Independent dealers now have a clearer roadmap for pricing compliance, courtesy of the Federal Trade Commission (FTC). On September 15, the FTC published a new set of frequently asked questions aimed at helping dealers align their advertising practices with the agency’s price transparency expectations.

The FAQs reinforce a core standard: the advertised price of a vehicle must be the actual price a consumer can pay to purchase it, excluding only charges the government requires. That means any dealer-imposed fees, including documentation charges, need to be built into the advertised price rather than added later or disclosed separately.

Beyond that headline rule, the guidance covers how to handle rebates and discounts in ads, negotiating optional add-ons, keeping pricing consistent across print, digital, and in-person communication, and advertising vehicles still in transit to the lot.

The FAQs follow the FTC’s March 2026 warning letters to 97 dealership groups over pricing and advertising practices, signaling that transparency remains a top enforcement priority. The agency continues to pursue litigation against dealers accused of misleading pricing and accepts consumer complaints at ReportFraud.ftc.gov.

Dealers are encouraged to review current advertising and listing practices against the new FAQs to help ensure full compliance.

Souce: NIADA

Sales

California dealers should be preparing now for significant changes coming October 1, 2026, when Senate Bill 766, commonly known as the California Combating Auto Retail Scams (CARS) Act, takes effect.

The new law introduces important requirements affecting the sale and lease of vehicles, including a new three-day cancellation right for qualifying used-vehicle transactions, new pricing and advertising requirements, additional rules concerning optional products, and increased recordkeeping responsibilities.

A New Three-Day Right to Cancel

One of the most significant changes is the new three-day right to cancel certain used-vehicle purchases and leases.

For qualifying used vehicles sold or leased for $50,000 or less, the customer will have a statutory right to cancel the transaction within the applicable three-day period. Unlike California's current optional cancellation program, the dealer cannot charge the customer for the right to cancel.

However, the law permits the dealer to charge a statutory restocking fee when the customer exercises the right to cancel.

The restocking fee is generally:

• 1.5% of the vehicle sale price

• Minimum of $200

• Maximum of $600

• Plus, when applicable, $1 for each mile driven over 250 miles, up to an additional $150

The cancellation right also has a 400-mile limitation, making accurate mileage documentation at delivery and return particularly important.

Dealers Must Provide the Required Notice

The CARS Act requires dealers to provide customers with specific information concerning their cancellation rights. The purchase or lease agreement must also contain the required CARS Act notice.

Dealers should not think of this simply as adding another form to the deal jacket. The new requirements affect the overall transaction workflow, including sales, contracting, customer communications, F&I, and accounting.

Advertising and Pricing Requirements

The CARS Act establishes new requirements concerning the total price communicated to consumers.

Dealers should review how prices are presented across all channels, including:

• Dealer websites

• Third-party inventory websites

• Online advertisements

• Email

• Text messages

• CRM communications

• Sales worksheets

• Payment presentations

A dealer's first written communication with a consumer concerning a specific vehicle can also trigger disclosure requirements. Dealers should therefore review their CRM templates and automated responses before October 1.

Optional Products and Add-Ons

The new law also places additional emphasis on optional products and add-ons.

Products should not be presented as required when they are optional, and dealers should take care to ensure that products being sold actually provide a benefit to the customer and are appropriate for the vehicle and transaction.

This means dealerships should review their F&I menus, product offerings and sales practices before the law becomes effective.

Cancellation Requires Good Recordkeeping

When a customer exercises the right to cancel, the dealer will need to document the transaction carefully.

Records may include:

• Date and time the customer exercises the cancellation right

• Vehicle mileage at delivery

• Vehicle mileage at return

• Condition of the returned vehicle

• Restocking fee calculation

• Refund calculation

• Trade-in status

• Proof of refund

• Required cancellation documentation

The law also establishes record-retention requirements, making a complete electronic audit trail increasingly important.

What Does This Mean for ASN Dealers?

ASN Software is reviewing the CARS Act requirements and incorporating the necessary changes into the dealership workflow.

Our goal is to make compliance as straightforward as possible—not simply provide another form for dealers to remember.

For qualifying transactions, ASN can help dealers identify the applicable cancellation requirement, track the cancellation period and mileage, calculate the applicable restocking fee, produce required documentation, and maintain the transaction history.

ASN is also reviewing related areas including Inventory, CRM, Sales, F&I, Contracting, eSign and Accounting to help dealers manage the new requirements.

Dealers Should Prepare Now

Before October 1, dealers should:

1. Review their current cancellation procedures.

2. Review advertising and website pricing practices.

3. Review CRM email and text templates.

4. Review F&I products and optional add-ons.

5. Confirm that updated CARS Act forms and disclosures are available.

6. Train sales, F&I and accounting personnel.

7. Test their DMS workflow before October 1.

The CARS Act represents a meaningful change to California vehicle sales practices. Preparing early will give dealerships time to update procedures, train employees, and make sure their systems are ready.

ASN Software will continue monitoring the implementation of SB 766 and will provide additional information and system updates as the October 1, 2026 effective date approaches.

This article is intended as a general overview of the California CARS Act and is not legal advice. Dealers should consult their legal or compliance professionals regarding how the law applies to their specific transactions and business practices.

Criminals don’t rely on fake pay stubs or forged signatures when they walk into your dealership anymore. 

They’re using synthetic identities. They’re generating STIPS with AI. They’re recruiting straw buyers, creating fake employers, and stacking loans. 

Modern-day fraudsters are sophisticated, organized, and harder to spot. The fraud you thought you knew is gone. So are more than 80,000 dealership vehicles every year.

I was talking with a close friend last week. We’ve both been in the car business for over 20 years. He owns a multi-rooftop group in California, and I run a software company in the auto industry. 

His biggest concern isn’t inventory, fixed ops, or costs. He’s more worried about fraud right now, and he’s got company.

Experian says nearly nine in 10 dealerships consider fraud a significant concern.

Seven out of ten believe it’s getting worse.

Dealers report discovering an average of four fraudulent deals a year — many after the transaction has already been completed.

Nearly half lose $10,000 to $20,000 on a single deal.

Almost a third lose even more.

What’s worse is that 60% of auto lenders now mandate dealerships to buy back fraudulent loans, shifting the loss back to the retailer.

What are dealers up against? 

Here are just a few of the tactics fraudsters are using now.

• “Synthetic identities,” which are completely fake borrowers with legitimate-looking credit histories.  
• AI-generated documents — like bank statements and driver’s licenses — that are so convincing, they fool a well-trained eye.  
• Straw buyers, or a person with legitimate credit financing vehicles for someone else who doesn’t qualify. 
• Bust-out fraud, where criminals spend months building excellent credit, then finance multiple vehicles before fading into oblivion. 
• Fake employers, where businesses are fabricated simply to verify employment when lenders call.  

Once thieves take possession, they make cars disappear — or make money from them — ASAP.  Some are exported overseas, others are title-washed or given new VINs, rented out, or sold for parts before lenders or law enforcement realize what happened.

The dealer immediately asks, “Who missed this?” And it’s a valid question. “Was it sales? F&I? The lender? Transport? Titling?”

It isn’t just a new car problem, because criminals aren’t after transportation. They’re after assets they can turn into fast cash, and used cars are often just as profitable, if not more. 

And it isn’t just an F&I problem.

I believe it’s a process problem.

Your dealership might have a great CRM, credit platform, identity verification tool, or compliance solution. None of these, individually, are the problem. The problem is what happens between them.

Think about the average car deal today.

The customer’s information gets entered into one system, then re-entered into another. Supporting documents get uploaded here and downloaded there. The lender asks for more information. Someone else uploads those additional details somewhere else.

Each step seems innocent, but collectively, they create exposure. That’s because everyone is looking at one piece of the car sales transaction, but nobody is looking at the entire picture anymore. And that’s when patterns disappear.

Professional fraudsters don’t exploit your software systems. They exploit the gaps that exist between your systems. In other words, they don’t need your process to fail. They just need it to bend.

Here are three things you can do today to mitigate fraud.

1. Verify identity before you verify anything else.

If you can’t confidently establish who’s standing in front of you — or sitting behind the screen — nothing else in the deal matters. 

Everything downstream depends on getting this first step right.

2. Close the gaps.

Every additional platform, login, transfer, upload, download, and re-enter creates another opportunity for something to be missed. 

Your goal isn’t to find a single magical fraud solution. It’s about fixing the gaps in your process so fraud can’t hide.

3. Make every deal follow the same process, every time.

Fraudsters love exceptions — like busy Saturdays, a customer everyone likes and “trusts,” a rushed delivery, or a deal ready to close (that everyone pushes through) because it’s 9:00pm and your store is ready to close, too.

The strongest and safest dealerships rely on one consistent process for every customer and every deal, every time. 

Here’s how I see it.

The car deal tells a story.

Who is this customer? Where do they work? How do they earn a living? Does their income match their lifestyle? Does the documentation support the application?

Does their story make sense?

When that story gets scattered across seven or eight different systems, it’s much harder to notice when a chapter doesn’t fit.

Criminals have evolved and your process needs to evolve, too. The dealerships that win this battle aren’t the ones with the most software. They’re the ones with the strongest process.

Source: Autoremarkting

Sales

ASN continues to add tools that help make your shop more efficient. We’re excited to announce that PartsTech is now integrated into the ASN Shop Management System, giving service shops a faster and easier way to search for and order parts.

If your shop uses the ASN Shop Management System, you'll notice a PartsTech link icon above Line 10 on your repair order screen. Click the icon and take a few minutes to explore this powerful new feature.

Everything You Need in One Place

Your Shop Management System is the hub of your business—tracking customers, repair history, labor, invoicing, and more. Now, with PartsTech built directly into the system, you no longer need to jump between multiple supplier websites or browser windows to find the right parts.

With a few clicks, you can:

• Search multiple parts suppliers at once.
• Compare pricing and availability.
• View real-time inventory and delivery estimates.
• Add selected parts directly to the active repair order.

The seamless integration eliminates unnecessary steps, saving valuable time while improving estimate accuracy and customer service.

Real-Time Information Means Better Productivity

Knowing which supplier has the part you need—and when it can be delivered—can make the difference between completing a repair today or delaying it until tomorrow.

PartsTech's cloud-based platform provides up-to-date inventory information and delivery estimates, allowing your shop to make informed purchasing decisions quickly. Faster ordering helps keep vehicles moving through the shop and technicians productive.

Take Advantage of This New Tool

If you haven't tried PartsTech yet, now is the perfect time. Simply click the PartsTech icon within your ASN Shop Management System and see how easy it is to search, compare, order, and add parts directly to your repair orders.

This is another example of ASN providing members with tools that improve efficiency, reduce wasted time, and help your shop operate more profitably.

Fraud is constantly evolving, and criminals are becoming more sophisticated in the ways they target individuals and businesses. Staying informed and vigilant is one of the best ways to protect yourself and your finances.

This year, we're seeing a significant increase in several types of fraud, including:

• Phone Scams
• Business Email Compromise (BEC)
• Elder Financial Exploitation
• Online Ticket and Merchandise Scams

Beware of Phone Scams

One of the fastest-growing fraud tactics is caller ID spoofing, where scammers manipulate the caller ID to make it appear as though a call or text message is coming from your bank. Their goal is to create a sense of urgency and convince you to share sensitive personal or financial information.

Scammers often claim they have detected suspicious activity on your account and need to verify your identity. While a legitimate representative from your bank may contact you regarding account activity, they will never ask for:

• Your full debit card or account number
• Your online banking username or password
• Your one-time verification or multi-factor authentication (MFA) codes

If you receive a call or text that seems suspicious, hang up immediately and contact your bank using the phone number listed on its official website, the back of your debit card, or your account statement. A legitimate bank representative will always respect your decision to call the bank directly.

How You Can Protect Yourself

Protecting your accounts is a shared responsibility. These simple habits can significantly reduce your risk of becoming a victim of fraud:

• Stay cautious. Never share personal or financial information with someone who contacts you unexpectedly.
• Verify the caller's identity. If a call or text seems suspicious, hang up and contact your bank using a trusted phone number.
• Monitor your accounts regularly. Review your transactions frequently using your bank's mobile app or online banking and report any unauthorized activity immediately.
• Enable dual approval for wire and ACH transactions. Requiring a second approval helps verify transactions, reduces errors, and provides an additional layer of protection against fraud.
• Report concerns immediately. If you suspect fraud or notice unusual account activity, contact your bank as soon as possible.

Don't Let Scammers Ruin the Experience

With major sporting events, concerts, festivals, and other popular events taking place throughout the year, fraudsters are taking advantage of excited fans by creating fake websites and selling counterfeit tickets and merchandise.

Before making a purchase, remember these safety tips:

• Purchase tickets and merchandise only from official websites or authorized sellers.
• Verify the website address (URL) before entering payment information.
• Be cautious of unsolicited offers or prices that seem too good to be true.
• Never send payments using cryptocurrency, gift cards, or wire transfers when purchasing tickets or merchandise.
• Watch for warning signs such as spelling errors, poor website quality, or high-pressure tactics urging you to "buy now."
• Many legitimate websites ask you to verify you're human by selecting images. Be cautious if a website instead asks you to enter keyboard shortcuts, download software, or perform other unusual actions.

ASN Support Alert

Scammers frequently impersonate technology support providers and attempt to gain remote access to your computer.

Remember: ASN only uses ASN Tech Connect to establish a remote connection when you have contacted us and requested technical support. We will never make an unsolicited (cold) call asking to connect to your computer, and we do not use any remote access platform other than our own secure connection method.

If someone claiming to represent ASN contacts you unexpectedly and asks you to install software or grant remote access:

• Do not allow them to connect to your computer.
• Do not use any remote connection method suggested by the caller.
• Hang up immediately.
• Contact ASN directly using our published phone number to verify whether the request is legitimate.

When in doubt, always verify first. Taking a few extra moments to confirm who you're dealing with can help protect your personal information, your finances, and your peace of mind.

The statement is political, and Elon Musk won’t be happy.

Electric vehicles have had a rough year. Washington killed the $7,500 federal tax credit last September, and price-sensitive buyers scattered almost overnight. New EV sales fell 27% in the first quarter of 2026, sinking to 5.8% of the market, according to Cox Automotive.

California felt it worse than most. The state that built the American EV habit watched its own electric share slide toward levels it hadn’t seen in years, well short of the targets it set for itself.

So the state decided to step back in. Governor Gavin Newsom signed SB 168 on Monday, July 13, creating a program called MyFirstEV that takes $3,500 off an electric car right at the dealership. Read the fine print, though, and you find a rule that lifts Rivian and Lucid, caps Tesla (TSLA), and lands like a message addressed to Austin, Texas.

How the instant EV rebate works

MyFirstEV throws out the old model. California’s previous Clean Vehicle Rebate Project made buyers apply and wait for a check. This one is a point-of-sale discount, so eligible buyers walk into a participating dealership and drive out with the money already gone from the price.

• $3,500 off a new EV priced under $50,000, or $1,750 off a used one under $25,000, according to the Governor’s office.
• A combined pool near $270 million once automakers match the state’s $135.5 million, according to the Governor’s office.
• Rivian’s cheapest model runs about $58,000 and Lucid’s about $71,000, yet both still qualify, according to Electrek.
• New U.S. EV sales dropped 27% in the first quarter of 2026, according to Cox Automotive.

There is no income cap, which is the first thing that jumped out at me. California spent years making its incentives means-tested, steering the biggest help toward lower-income drivers. This program flips that.

Price is the only gate, the buyer has to be a California resident, and they just attest that this is their first zero-emission vehicle. A curb-weight limit of 8,500 pounds keeps it to ordinary passenger cars, and the California Air Resources Board (CARB) is still finalizing deals with automakers, with a launch expected later this summer.

The headquarters loophole that boxes out Tesla

Here is the part that turns a discount into a statement. That $50,000 price cap vanishes for EVs built by California-headquartered, EV-only automakers, judged by where a company’s management sat on January 1, 2026, according to Electrek. In practice, that describes exactly two carmakers.

Rivian (RIVN), with engineering offices in Irvine, makes the cut. So does Lucid (LCID), based in the San Francisco Bay Area. Their entry models sit thousands of dollars above the cap that binds everyone else, and they collect the full $3,500 anyway.

Tesla (TSLA) does not. The company moved its headquarters to Austin, Texas, in 2021, so it no longer counts as a California automaker under the rule. Only its sub-$50,000 Model 3 and Model Y configurations qualify. The Cybertruck, the Model S, and the Model X get nothing.

When I ran the eligible models against the price caps, the tell was obvious. The exemption rewards where a company keeps its logo, not where it builds its cars. Tesla still assembles hundreds of thousands of vehicles a year at its Fremont, California, plant, more EVs in the state than anyone. Rivian builds in Illinois. Lucid builds in Arizona.

The framing is hard to miss given the long public feud between Newsom and Tesla CEO Elon Musk. Newsom’s office cast the whole package as a stand against President Donald Trump’s push to “surrender the clean car industry to China on a silver platter,” according to the Governor’s office.

Electrek was blunter, writing that the carve-out “turns an affordability program into a political statement,” according to Electrek.

What the rebate means for California buyers

Strip away the politics, and the $3,500 is real money. For a family financing a new car, that is a few months of payments erased before they leave the lot, or a serious dent in the down payment on a tight budget.

The used-EV piece may matter even more. A wave of off-lease electric cars is landing on dealer lots, and $1,750 off a sub-$25,000 vehicle is the kind of discount a first-time buyer actually feels.

Plenty of mainstream options clear the $50,000 line. GM (GM) has the Equinox EV, the Blazer EV, and the Bolt, which starts under $30,000. Ford’s (F) Mustang Mach-E, Toyota’s bZ, and Hyundai’s Ioniq 5 all qualify too.

What struck me reading the bill was the quiet math of the no-income-cap rule. A first-time buyer picking up a $71,000 Lucid gets the same $3,500 as a family stretching for a $30,000 Bolt, and arguably a better deal, since that luxury sedan would not qualify for a dime anywhere else. A program sold as help for regular families also happens to underwrite some of the priciest EVs on the road.

Why this EV fight is far from over

The loophole is the kind of thing lawyers notice. Rewarding a corporate flag over actual California manufacturing invites a challenge, and Tesla, the state’s largest EV employer, would have a real argument that the rule punishes it for a headquarters address.

There is a bigger backdrop, too. The post-credit slump amounted to “a necessary reset,” according to Cox Automotive, and U.S. sales ticked back up in the second quarter as state programs stepped in, according to InsideEVs. California is betting it can rebuild that momentum one first-time buyer at a time.

The message to Tesla landed on July 13. The reply may come from a courtroom, and whatever a judge decides could tell every other state how far it can go in picking winners with public money.

Anyone shopping for a first EV this summer should read the sticker closely, because in California, the discount now depends on more than the car.

Source:  TheSteet

Cox Automotive recently projected slight softening of certified pre-owned vehicle sales and overall used-car retail transactions for the year.

But experts also see the movements reflected “strength and resilience” of the used-car market.

Let’s get into the numbers.

As part of its Q2 2026 Mid-Year Review in Detroit, Cox Automotive chief economist Jeremy Robb recapped that this year’s used-car retail sales are expected to come in at 38.4 million units, which would be down less than 1% year-over-year.

Robb added that Cox Automotive is still expecting to see 2.6 million CPO sales this year. That number would represent roughly a 2% drop compared to last year’s final tally.

The projections prompted Cox Automotive deputy chief economist Mark Strand to say, “When you combine the tough comp versus the tariff driven market frenzy with an energy shock, rising inflation and ongoing general affordability pressures, the small decline in the used sales pace looks like relative strength and resilience.”

As part of its Q2 2026 Mid-Year Review in Detroit, Cox Automotive chief economist Jeremy Robb recapped that this year’s used-car retail sales are expected to come in at 38.4 million units, which would be down less than 1% year-over-year.

Robb added that Cox Automotive is still expecting to see 2.6 million CPO sales this year. That number would represent roughly a 2% drop compared to last year’s final tally.

The projections prompted Cox Automotive deputy chief economist Mark Strand to say, “When you combine the tough comp versus the tariff driven market frenzy with an energy shock, rising inflation and ongoing general affordability pressures, the small decline in the used sales pace looks like relative strength and resilience.”

Source: AutoRemarketing