Wow, this is news that anyone who loves cars should definitely pay attention to. Starting October 1, you can return a used car purchased from a dealer in California within three days.

This law, known as SB 766 or the CARS Act, was signed by the governor last October and has now come into effect after a year of preparation. Its official name is the Combating Auto Retail Scams Act, which aims to prevent auto sales fraud.

We've all had that experience of signing a contract and then regretting it overnight. Now, there's a legal way to reverse that regret.

In fact, there was a similar system in place before. When purchasing a used car under $40,000, dealers were required to offer a two-day contract cancellation option.

The problem was that it wasn't free. Depending on the price of the car, you had to pay $75, $150, or $250, or if the car was over $30,000, you had to pay 1% of the price separately.

Honestly, I've rarely seen anyone actually pay for that option. Dealers didn't actively promote it either. The common understanding was that once you signed, it was final.

The new law eliminates this option and instead provides a three-day cancellation right for free. The key point is that dealers cannot charge separately for this.

This applies to used cars priced under $50,000. It includes not only purchases but also leased used cars. Given the current used car market, most transactions fall under this new threshold, which is a significant increase from the previous $40,000 limit.

The period is three days from the day after the contract is signed, based on the calendar. If the third day falls on a dealer's day off, it extends to the end of the next business day.

One thing to be cautious about is the mileage. If you drive more than 400 miles after the contract, your return right is lost.

So, don't get too excited about your new car and take a long drive over the weekend. It would be really unfortunate to lose that right.

It's not completely free to return the car. Dealers can charge a restocking fee of 1.5% of the car price, with a minimum of $200 and a maximum of $600.

For example, if the car costs $20,000, 1.5% would be $300, which would be deducted. If it's a $10,000 car, the calculated amount would be $150, but the minimum fee of $200 applies.

If the mileage exceeds 250 miles, an additional charge of $1 per mile applies. This extra fee is capped at $150.

Still, if you can reverse a mistake worth thousands of dollars for a few hundred dollars, I think it's a worthwhile insurance. I would gladly pay that fee.

When returning the car, it must be in the same condition as when you received it. Normal wear and tear from regular use is acceptable, but if there are signs of an accident or damage, that changes things. It's best to be careful while driving for those three days.

Also, you must bring the car back to the dealer during business hours. It's not as simple as just making a phone call, so keep that in mind when scheduling.

Refunds should generally be processed within 48 hours, and if you paid by check, it may take a little longer. The amount returned will be the total minus any fees.

If you had a trade-in vehicle, you will get that back as well. If the dealer sold it in the meantime, they must give you the highest amount among the contract price, actual sale price, or market value.

Be aware of the exclusions as well. New cars, private sales, auction vehicles, lease buyouts, corporate and fleet purchases, and motorcycles are not included.

This means that cars bought from Craigslist or friends still have no way to be returned. You should still be thorough when checking private sales as before.

The CARS Act includes more good news beyond returns. It requires dealers to clearly show the total price, including dealer markups, in advertisements and initial written disclosures.

Additionally, they can no longer sell add-on products that provide no benefit to the buyer. When offering additional options in writing, they must clearly state that they are not mandatory.

Oh, this is a really welcome change. I can't be the only one who has gone to a dealership after seeing an advertised price only to find a bunch of strange charges on the paperwork.

I'm not generally a fan of increasing regulations. However, I believe this law poses no harm to honest dealers and only enhances consumer trust.

My advice is simple. Make sure the contract includes the three-day cancellation right and take a photo of the date you signed and the mileage on the odometer.

During the three days, I recommend just using the car for commuting and getting it checked at a mechanic. If you hear any strange noises or warning lights come on, it's not too late to make a decision then.

Details may vary by transaction, so be sure to check the DMV's Car Buyer's Bill of Rights before signing the contract. Knowing your rights ultimately protects your money.