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Cal. Civil Code § 2981 (2026)

✓ current as of May 2026
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As used in this chapter, unless the context otherwise requires:

(a)“Conditional sale contract” means:

(1)A contract for the sale of a motor vehicle between a buyer and a seller, with or without accessories, under which possession is delivered to the buyer and either of the following:

(A)The title vests in the buyer thereafter only upon the payment of all or a part of the price, or the performance of any other condition.

(B)A lien on the property is to vest in the seller as security for the payment of part or all of the price, or for the performance of any other condition.

(2)A contract for the bailment of a motor vehicle between a buyer and a seller, with or without accessories, by which the bailee or lessee agrees to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the vehicle and its accessories, if any, at the time the contract is executed, and by which it is agreed that the bailee or lessee will become, or for no other or for a nominal consideration has the option of becoming, the owner of the vehicle upon full compliance with the terms of the contract.

(b)“Seller” means a person engaged in the business of selling or leasing motor vehicles under conditional sale contracts.

(c)“Buyer” means the person who buys or hires a motor vehicle under a conditional sale contract.

(d)“Person” includes an individual, company, firm, association, partnership, trust, corporation, limited liability company, or other legal entity.

(e)“Holder” means the person entitled to enforce the conditional sale contract against the buyer at the time.

(f)“Cash price” means the amount for which the seller would sell and transfer to the buyer unqualified title to the motor vehicle described in the conditional sale contract, if the property were sold for cash at the seller’s place of business on the date the contract is executed, and shall include taxes to the extent imposed on the cash sale and the cash price of accessories or services related to the sale, including, but not limited to, delivery, installation, alterations, modifications, improvements, document preparation fees, a service contract, a vehicle contract cancellation option agreement, and payment of a prior credit or lease balance remaining on property being traded in.

(g)“Downpayment” means a payment that the buyer pays or agrees to pay to the seller in cash or property value or money’s worth at or prior to delivery by the seller to the buyer of the motor vehicle described in the conditional sale contract. The term shall also include the amount of any portion of the downpayment the payment of which is deferred until not later than the due date of the second otherwise scheduled payment, if the amount of the deferred downpayment is not subject to a finance charge. The term does not include any administrative finance charge charged, received, or collected by the seller as provided in this chapter.

(h)“Amount financed” means the amount required to be disclosed pursuant to paragraph (8) of subdivision (a) of Section 2982.

(i)“Unpaid balance” means the difference between subdivisions (f) and (g), plus all insurance premiums (except for credit life or disability insurance when the amount thereof is included in the finance charge), which are included in the contract balance, and the total amount paid or to be paid as follows:

(1)To a public officer in connection with the transaction.

(2)For license, certificate of title, and registration fees imposed by law, and the amount of the state fee for issuance of a certificate of compliance or certificate of waiver pursuant to Section 9889.56 of the Business and Professions Code.

(j)“Finance charge” has the meaning set forth for that term in Section 226.4 of Regulation Z. The term shall not include delinquency charges or collection costs and fees as provided by subdivision (k) of Section 2982, extension or deferral agreement charges as provided by Section 2982.3, or amounts for insurance, repairs to or preservation of the motor vehicle, or preservation of the security interest therein advanced by the holder under the terms of the contract.

(k)“Total of payments” means the amount required to be disclosed pursuant to subdivision (h) of Section 226.18 of Regulation Z. The term includes any portion of the downpayment that is deferred until not later than the second otherwise scheduled payment and that is not subject to a finance charge. The term shall not include amounts for which the buyer may later become obligated under the terms of the contract in connection with insurance, repairs to or preservation of the motor vehicle, preservation of the security interest therein, or otherwise.

(l)“Motor vehicle” means a vehicle required to be registered under the Vehicle Code that is bought for use primarily for personal or family purposes, and does not mean any vehicle that is bought for use primarily for business or commercial purposes or a mobilehome, as defined in Section 18008 of the Health and Safety Code that is sold on or after July 1, 1981. “Motor vehicle” does not include any trailer that is sold in conjunction with a vessel and that comes within the definition of “goods” under Section 1802.1.

(m)“Purchase order” means a sales order, car reservation, statement of transaction, or any other such instrument used in the conditional sale of a motor vehicle pending execution of a conditional sale contract. The purchase order shall conform to the disclosure requirements of subdivision (a) of Section 2982 and Section 2984.1, and subdivision (m) of Section 2982 shall apply.

(n)“Regulation Z” means a rule, regulation, or interpretation promulgated by the Board of Governors of the Federal Reserve System (“Board”) under the federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601, et seq.), and an interpretation or approval issued by an official or employee of the Federal Reserve System duly authorized by the board under the Truth in Lending Act, as amended, to issue the interpretations or approvals.

(o)“Simple-interest basis” means the determination of a finance charge, other than an administrative finance charge, by applying a constant rate to the unpaid balance as it changes from time to time either:

(1)Calculated on the basis of a 365-day year and actual days elapsed (although the seller may, but need not, adjust its calculations to account for leap years); reference in this chapter to the “365-day basis” shall mean this method of determining the finance charge, or

(2)For contracts entered into prior to January 1, 1988, calculated on the basis of a 360-day year consisting of 12 months of 30 days each and on the assumption that all payments will be received by the seller on their respective due dates; reference in this chapter to the “360-day basis” shall mean this method of determining the finance charge.

(p)“Precomputed basis” means the determination of a finance charge by multiplying the original unpaid balance of the contract by a rate and multiplying that product by the number of payment periods elapsing between the date of the contract and the date of the last scheduled payment.

(q)“Service contract” means “vehicle service contract” as defined in subdivision (c) of Section 12800 of the Insurance Code.

(r)“Surface protection product” means the following products installed by the seller after the motor vehicle is sold:

(1)Undercoating.

(2)Rustproofing.

(3)Chemical or film paint sealant or protectant.

(4)Chemical sealant or stain inhibitor for carpet and fabric.

(s)“Theft deterrent device” means the following devices installed by the seller after the motor vehicle is sold:

(1)A vehicle alarm system.

(2)A window etch product.

(3)A body part marking product.

(4)A steering lock.

(5)A pedal or ignition lock.

(6)A fuel or ignition kill switch.

(t)“Guaranteed asset protection waiver” means an optional contractual obligation under which a seller agrees, for additional consideration, to cancel or waive all or part of amounts due on the buyer’s conditional sale contract subject to this chapter in the event of a total loss or unrecovered theft of the motor vehicle specified in the conditional sale contract.

Notes of Decisions
Cited in 87 cases (4 in the last 5 years), 1948–2024 · leading case: Sanchez v. Valencia Holding Co., 353 P.3d 741 (Cal. 2015).
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Sanchez v. Valencia Holding Co., 353 P.3d 741 (Cal. 2015). · cites it 4× “Sanchez alleged violations of the Automobile Sales Finance Act (Civ. Code, §§ 2981–2984.6), the unfair competition law (UCL) (Bus.”
Raceway Ford Cases, 385 P.3d 397 (Cal. 2016). · cites it 3× “*164 The Automobile Sales Finance Act (ASFA), also known as the Rees-Levering Motor Vehicle Sales and Finance Act (Civ. Code, § 2981 et seq. ) is a consumer protection statute that governs the sale of vehicles where the buyer finances all or part of the car's purchase price.”
Bank of Am. v. Lallana, 960 P.2d 1133 (Cal. 1998). · cites it 6× “For secured debts subject to its provisions, the Rees-Levering Motor Vehicle Sales and Finance Act (Civ.Code, § 2981 et seq.; hereafter the Rees-Levering Act) requires that a creditor, before selling a repossessed car, notify the debtor of the right to redeem the car before sale.”
Jose Mondragon v. Capital One Auto Fin., 736 F.3d 880 (9th Cir. 2013). “, the Automobile Sales Finance Act, Cal. Civ.Code § 2981, et seq., and the Unfair Competition Law, Cal.”
Americredit Fin. Servs., Inc. v. Penrod (In Re Penrod), 392 B.R. 835 (9th Cir. BAP 2008). · cites it 2× “Despite these arguments, Amerieredit requests that we use California’s doctrine of in pari materia to incorporate into the UCC term “price of the collateral” the definition of “cash sale price” from California’s automobile sales and finance law, found at Cal. Civil Code § 2981…”
Auto. Funding Grp., Inc. v. Garamendi, 2003 Cal. Daily Op. Serv. 11119 (Cal. Ct. App. 2003). · cites it 2× “) AFG has asked us to judicially notice amendments to certain provisions of the Automobile Sales Finance Act which make mention of car loan debt cancellation provisions.”
Boerner v. Colwell Co., 577 P.2d 200 (Cal. 1978). · cites it 2× “In California the basic laws in the consumer area, which among other things set limitations upon finance charges, are the Rees-Levering Act (Civ. Code, § 2981 et seq.), governing installment sales of motor vehicles, and the Unruh Act (Civ.”
In re Tobacco Cases II, 240 Cal. App. 4th 779 (Cal. Ct. App. 2015). “Juarez was a class action that alleged the defendant violated the UCL by violating the Automobile Sales Finance Act (Civ. Code, § 2981 et seq.). (Jurarez, at p.”
Davis v. Ford Motor Credit Co. LLC, 179 Cal. App. 4th 581 (Cal. Ct. App. 2009). “Davis’s theory is that these successive late fees are prohibited by the Rees-Levering Motor Vehicle Sales and Finance Act (Rees-Levering) (Civ. Code, §§ 2981 et seq., 2982, subd. (k)), and are actionable under the unfair competition law (UCL) (Bus.”
Bernardi v. Cnty. of Monterey, 167 Cal. App. 4th 1379 (Cal. Ct. App. 2008). “In Graciano, an automobile purchaser sued a dealership under the Automobile Sales Finance Act (Civ. Code, § 2981 et seq.) and the Consumers Legal Remedies Act (Civ.”
Lafferty v. Wells Fargo Bank, 213 Cal. App. 4th 545 (Cal. Ct. App. 2013). ““The Rees-Levering Automobile Sales Finance Act [(Civ. Code, § 2981 et seq.)] became effective January 1, 1962.”
Tri Counties Bank v. Superior Court, 167 Cal. App. 4th 1332 (Cal. Ct. App. 2008). “Amaya-Guenon (hereafter real parties in interest), alleging that petitioner committed unfair business practices by failing to give statutory notice to borrowers as required under the Rees-Levering Automobile Sales Finance Act (Civ. Code, § 2981 et seq.) prior to seeking a…”
Show all 87 citing cases →
— Cal. Civil Code § 2981(a) — 1 case
Oller v. Bank of Am., 342 F. Supp. 21 (N.D. Cal. 1972).
— Cal. Civil Code § 2981(e) — 3 cases
In Re Acaya, 369 B.R. 564 (Bankr. N.D. Cal. 2007).
Americredit Fin. Servs., Inc. v. Penrod, 611 F.3d 1158 (9th Cir. 2010).
In Re Penrod, 636 F.3d 1175 (9th Cir. 2010).
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