SB791 - Vehicle dealers: document processing charge.

Enrolled September 13, 2025 Passed IN Senate September 10, 2025 Passed IN Assembly September 08, 2025 Amended IN Assembly September 02, 2025 Amended IN Assembly July 03, 2025 Amended IN Senate May 06, 2025 Amended IN Senate March 24, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 791 Introduced by Senator Cortese (Coauthors: Senators Archuleta, Ashby, Dahle, Gonzalez, and Strickland) (Coauthors: Assembly Members Chen and Flora) February 21, 2025 An act to amend, repeal, and add Sections 4456.5 and 11713.1 of the Vehicle Code, relating to vehicles. LEGISLATIVE COUNSEL'S DIGEST SB 791, Cortese. Vehicle dealers: document processing charge. Existing law authorizes a dealer to charge the purchaser or lessee of a vehicle a document processing charge for the preparation and processing of documents, disclosures, and titling, registration, and information security obligations imposed by state and federal law. Existing law authorizes a dealer that has a contractual agreement with the Department of Motor Vehicles to be a private industry partner to set the document processing charge at up to $85 and authorizes all other dealers to set the document processing charge at up to $70. This bill would, until January 1, 2031, subject to specified requirements, authorize a dealer to charge a document processing charge that exceeds those amounts if the charge does not exceed 1% of the total price of the vehicle and does not exceed $260. The bill would exempt the sale of vehicles to the State of California and any local governmental entity from these provisions. The bill would make a conforming change. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 4456.5 of the Vehicle Code is amended to read: 4456.5. (a) A dealer may charge the purchaser or lessee of a vehicle the following charges: (1) A document processing charge for the preparation and processing of documents, disclosures, and titling, registration, and information security obligations imposed by state and federal law. The dealer document processing charge shall not be represented as a governmental fee. (A) If a dealer has a contractual agreement with the department to be a private industry partner pursuant to Section 1685, the document processing charge shall not exceed eighty-five dollars ($85). (B) If a dealer does not have a contractual agreement with the department to be a private industry partner pursuant to Section 1685, the document processing charge shall not exceed seventy dollars ($70). (C) (i) Subject to the requirements described in subdivision (b), a dealer may charge a document processing charge that exceeds the amounts specified in subparagraphs (A) and (B) if both of the following conditions are satisfied: (I) The document processing charge does not exceed 1 percent of the total price of the vehicle. (II) The document processing charge does not exceed two hundred sixty dollars ($260). (ii) For purposes of this subparagraph, “total price of the vehicle” means the price of the vehicle before the addition of government charges and any additional accessories and services ordered by the purchaser or lessee. (iii) This subparagraph shall not apply to the sale of vehicles to the State of California or any local governmental entity, including cities, counties, cities and counties, and special districts. (2) An electronic filing charge, not to exceed the actual amount the dealer is charged by a first-line service provider for providing license plate processing, postage, and the fees and services authorized pursuant to subdivisions (a) and (d) of Section 1685, including services related to reporting vehicle sales and producing temporary license plates pursuant to Sections 4456 and 4456.2. The electronic filing charge shall not be used to pay for additional fees, goods, or services not directly related to the electronic registration of a motor vehicle, including, but not limited to, the receipt by the dealer of free or discounted goods, services, or financial incentives. The director may establish, through the adoption of regulations, the maximum amount that a first-line service provider may charge a dealer. The electronic filing charge shall not be represented as a governmental fee. (b) A dealer that charges a document processing charge pursuant to subparagraph (C) of paragraph (1) of subdivision (a) shall comply with all of the following: (1) The dealer shall conspicuously display a notice, not less than 8 inches high and 10 inches wide, in each sales office and sales cubicle of a dealer’s established place of business where written terms of specific sale or lease transactions are discussed with prospective purchasers or lessees, and in each room of a dealer’s established place of business where sale and lease contracts are regularly executed, that states the following: “The dealer is authorized to collect a document processing charge that varies based on the price of the vehicle, but shall in no event exceed $260. This charge is not a government fee.” (2) The dealer shall provide to the customer, prior to the execution of the sales or lease agreement, a disclosure that includes the specific amount of the document processing charge and the following statement in bold 12-point font: “The dealer is authorized to collect a document processing charge in the final contract. This charge is not a government fee.” (3) A dealer shall not collect any other charge for the preparation and processing of documents, disclosures, and titling, registration, and information security obligations imposed by state and federal law, unless the charge is expressly authorized by state or federal law. (c) As used in this section, the term “first-line service provider” shall have the same meaning as defined in subdivision (b) of Section 1685. (d) This section does not prohibit a first-line service provider from entering into contracts with a dealer for products and services unrelated to electronic vehicle registration services. (e) This section shall remain in effect only until January 1, 2031, and as of that date is repealed. SEC. 2. Section 4456.5 is added to the Vehicle Code, to read: 4456.5. (a) A dealer may charge the purchaser or lessee of a vehicle the following charges: (1) A document processing charge for the preparation and processing of documents, disclosures, and titling, registration, and information security obligations imposed by state and federal law. The dealer document processing charge shall not be represented as a governmental fee. (A) If a dealer has a contractual agreement with the department to be a private industry partner pursuant to Section 1685, the document processing charge shall not exceed eighty-five dollars ($85). (B) If a dealer does not have a contractual agreement with the department to be a private industry partner pursuant to Section 1685, the document processing charge shall not exceed seventy dollars ($70). (2) An electronic filing charge, not to exceed the actual amount the dealer is charged by a first-line service provider for providing license plate processing, postage, and the fees and services authorized pursuant to subdivisions (a) and (d) of Section 1685, including services related to reporting vehicle sales and producing temporary license plates pursuant to Sections 4456 and 4456.2. The electronic filing charge shall not be used to pay for additional fees, goods, or services not directly related to the electronic registration of a motor vehicle, including, but not limited to, the receipt by the dealer of free or discounted goods, services, or financial incentives. The director may establish, through the adoption of regulations, the maximum amount that a first-line service provider may charge a dealer. The electronic filing charge shall not be represented as a governmental fee. (b) As used in this section, the term “first-line service provider” shall have the same meaning as defined in subdivision (b) of Section 1685. (c) This section does not prohibit a first-line service provider from entering into contracts with a dealer for products and services unrelated to electronic vehicle registration services. (d) This section shall become operative on January 1, 2031. SEC. 3. Section 11713.1 of the Vehicle Code is amended to read: 11713.1. It is a violation of this code for the holder of a dealer’s license issued under this article to do any of the following: (a) Advertise a specific vehicle for sale without identifying the vehicle by its model, model-year, and either its license number or that portion of the vehicle identification number that distinguishes the vehicle from all other vehicles of the same make, model, and model-year. Model-year is not required to be advertised for current model-year vehicles. Year models are no longer current when ensuing year models are available for purchase at retail in California. An advertisement that offers for sale a class of new vehicles in a dealer’s inventory, consisting of five or more vehicles, that are all of the same make, model, and model-year is not required to include in the advertisement the vehicle identification numbers or license numbers of those vehicles. (b) Advertise the total price of a vehicle without including all costs to the purchaser at time of sale, except taxes, vehicle registration fees, the California tire fee, as defined in Section 42885 of the Public Resources Code, emission testing charges not exceeding fifty dollars ($50), actual fees charged for certificates pursuant to Section 44060 of the Health and Safety Code, finance charges, and any dealer document processing charge or charge to electronically register or transfer the vehicle. (c) (1) Exclude from an advertisement of a vehicle for sale that there will be added to the advertised total price at the time of sale, charges for sales tax, vehicle registration fees, the California tire fee, the fee charged by the state for the issuance of a certificate of compliance or noncompliance pursuant to a statute, finance charges, a charge to electronically register or transfer the vehicle, and a dealer document processing charge. (2) The obligations imposed by paragraph (1) are satisfied by adding to the advertisement a statement containing no abbreviations and that is worded in substantially the following form: “Plus government fees and taxes, any finance charges, any dealer document processing charge not to exceed two hundred sixty dollars ($260), any electronic filing charge, and any emission testing charge.” (3) For purposes of paragraph (1), “advertisement” means an advertisement in a newspaper, magazine, or direct mail publication that is two or more columns in width or one column in width and more than seven inches in length, or on a webpage of a dealer’s internet website that displays the price of a vehicle offered for sale on the Internet, as that term is defined in paragraph (6) of subdivision (f) of Section 17538 of the Business and Professions Code. (d) Represent the dealer document processing charge, electronic registration or transfer charge, or emission testing charge, as a governmental fee. (e) Fail to sell a vehicle to a person at the advertised total price, exclusive of taxes, vehicle registration fees, the California tire fee, the fee charged by the state for the issuance of a certificate of compliance or noncompliance pursuant to a statute, finance charges, mobilehome escrow fees, the amount of a city, county, or city and county imposed fee or tax for a mobilehome, a dealer document processing charge, an electronic registration or transfer charge, and a charge for emission testing not to exceed fifty dollars ($50) plus the actual fees charged for certificates pursuant to Section 44060 of the Health and Safety Code, while the vehicle remains unsold, unless the advertisement states the advertised total price is good only for a specified time and the time has elapsed. Advertised vehicles shall be sold at or below the advertised total price, with statutorily permitted exclusions, regardless of whether the purchaser has knowledge of the advertised total price. (f) (1) Advertise for sale, sell, or purchase for resale a new vehicle of a line-make for which the dealer does not hold a franchise. (2) This subdivision does not apply to a transaction involving the following: (A) A mobilehome. (B) A commercial coach, as defined in Section 18001.8 of the Health and Safety Code. (C) An off-highway motor vehicle subject to identification as defined in Section 38012. (D) A manufactured home. (E) A new vehicle that will be substantially altered or modified by a converter prior to resale. (F) A commercial vehicle with a gross vehicle weight rating of more than 10,000 pounds. (G) A vehicle purchased for export and exported outside the territorial limits of the United States without being registered with the department. (H) A vehicle acquired in the ordinary course of business as a new vehicle by a dealer franchised to sell that vehicle, if all of the following apply: (i) The manufacturer or distributor of the vehicle files a bankruptcy petition. (ii) The franchise agreement of the dealer is terminated, canceled, or rejected by the manufacturer or distributor as part of the bankruptcy proceedings and the termination, cancellation, or rejection is not a result of the revocation by the department of the dealer’s license or the dealer’s conviction of a crime. (iii) The vehicle is held in the inventory of the dealer on the date the bankruptcy petition is filed. (iv) The vehicle is sold by the dealer within six months of the date the bankruptcy petition is filed. (3) Subparagraph (H) of paragraph (2) does not entitle a dealer whose franchise agreement has been terminated, canceled, or rejected to continue to perform warranty service repairs or continue to be eligible to offer or receive consumer or dealer incentives offered by the manufacturer or distributor. (g) Sell a park trailer, as specified in Section 18009.3 of the Health and Safety Code, without disclosing in writing to the purchaser that a park trailer is required to be moved by a transporter or a licensed manufacturer or dealer under a permit issued by the Department of Transportation or a local authority with respect to highways under their respective jurisdictions. (h) Advertise free merchandise, gifts, or services provided by a dealer contingent on the purchase of a vehicle. “Free” includes merchandise or services offered for sale at a price less than the seller’s cost of the merchandise or services. (i) (1) Advertise vehicles, and related goods or services, at a specified dealer price, with the intent not to supply reasonably expectable demand, unless the advertisement discloses the number of vehicles in stock at the advertised price. In addition, whether or not there are sufficient vehicles in stock to supply a reasonably expectable demand, [Text truncated for display. 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