State Law Guide - Updated January 2026
California GAP/VSC Refund Demand Rights
Under California Civil Code 1794.41, California gives you the right to cancel and receive refunds on F&I products. Dealers who fail to comply face Treble damages (3x) for willful violations.
Quick Answer
In California, you can cancel dealer add-on products at any time. Refunds must be issued within 30 days. You can sue in Small Claims Court for up to $12,500.
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Key California Provisions
| Provision | Requirement | Your Right |
|---|---|---|
| Cancellation Fee | $0 (prohibited) | No fee can be charged to cancel GAP |
| Refund Method | Pro-rata | Entitled to unused portion of premium |
| Refund Deadline | 30 days | Refund must be issued within 30 days |
| Treble Damages | For willful violations | Can recover up to 3x if dealer refuses |
| Pro-Rata Calculation | Required | Based on remaining loan term at payoff |
Cancellation Fee
$0 (prohibited)Refund Method
Pro-rataRefund Deadline
30 daysTreble Damages
For willful violationsPro-Rata Calculation
RequiredWhat California Law Requires
Your Cancellation Rights
Under California Civil Code 1794.41, California consumers have the right to cancel F&I products purchased from dealers.After this period, you're still entitled to a pro-rata refund based on unused time or mileage.
Refund Timeline
Once you submit a cancellation request, the dealer or administrator has 30 days to process your refund. Failure to comply may result in Treble damages (3x) for willful violations.
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$39 - Avg California refund: $650 - Potential 16x return
Frequently Asked Questions
Do I get a GAP refund if I pay off my car early in California?
Yes. Under California Civil Code 1794.41, you're entitled to a pro-rata refund of your unused GAP insurance when you pay off your loan early. California also prohibits cancellation fees, so you receive the full pro-rata amount.
What if my California dealer won't refund my GAP?
If a dealer willfully refuses to refund your GAP insurance, California law allows you to recover treble damages (3x the amount owed). File a formal demand letter first, then pursue in Small Claims Court.
How is the pro-rata GAP refund calculated?
The refund is based on the unused portion of your GAP coverage. If you paid $800 for GAP on a 60-month loan and paid it off after 36 months, you'd be owed approximately $320 (24/60 x $800).
Does the refund go to me or my lender?
If you've already paid off your loan, the refund goes directly to you. If you still have a loan balance, it typically goes to the lender first. Verify the refund destination when you cancel.
California Regulatory Contacts
If you need to file a complaint or seek assistance, contact these official agencies:
Contact information is provided for reference. Verify current details on official agency websites.
Compare Other States
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Based on California Civil Code 1794.41