AFIP Cheat Sheet 2026

The 30 highest-yield AFIP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which federal law requires lenders to disclose the Annual Percentage Rate (APR) to borrowers before finalizing a loan? → Truth in Lending Act (TILA)
2. Which regulatory requirement is UNIVERSAL across all Certified Association of Finance & Insurance Professionals practice settings? → Maintaining current certification and continuing education
3. Which documentation practice BEST demonstrates regulatory compliance for AFIP certified professionals? → Maintaining organized, dated, and signed records of all activities
4. When a lender cancels a portion of a customer's auto loan (e.g., after repossession), the canceled amount is reported to the borrower on which IRS form? → Form 1099-C
5. What is the main purpose of term life insurance? → Provide coverage for a limited time
6. What is the benefit of setting SMART financial goals? → They are specific and trackable
7. What is 'tax-loss harvesting' as a strategy for F&I professionals advising clients on investment accounts? → Selling securities at a loss to offset capital gains and reduce tax liability
8. Which risk management approach is MOST effective for AFIP professionals when evaluating potential workplace hazards? → Proactive hazard identification and assessment
9. Effective communication between Certified Association of Finance & Insurance Professionals professionals and stakeholders requires which essential element? → Adapting communication style to the audience while maintaining accuracy
10. What is the primary tax advantage of a Traditional IRA contribution for an eligible U.S. taxpayer? → Contributions may be tax-deductible, reducing current taxable income
11. What is the MOST important principle of professional documentation in Certified Association of Finance & Insurance Professionals practice? → Recording information accurately, objectively, and in a timely manner
12. Why is client confidentiality important? → To protect client privacy
13. What is the BEST way for a Certified Association of Finance & Insurance Professionals professional to stay current with regulatory changes? → Monitor regulatory bodies, attend CE, and participate in professional associations
14. Credit life insurance offered through an F&I department is primarily designed to: → Pay off the outstanding loan balance if the primary borrower dies
15. What is the PRIMARY reason for regulatory compliance in the Certified Association of Finance & Insurance Professionals profession? → To protect public safety, ensure quality, and maintain professional integrity
16. In the context of vehicle sales, which tax is typically calculated as a percentage of the vehicle's purchase price and collected at the time of sale? → Sales tax
17. A balloon payment loan in the context of auto financing means: → A large lump-sum payment is due at the end of the loan term
18. When conducting a risk assessment for AFIP operations, which factor should receive the HIGHEST priority? → Probability and severity of potential harm
19. In Certified Association of Finance & Insurance Professionals practice, what is the FIRST step when a safety hazard is identified in the workplace? → Immediately secure the area and report the hazard
20. In AFIP practice, what happens when regulations are updated? → Professionals must update knowledge and practices to meet new requirements
21. Which insurance covers medical expenses for illness or injury? → Health insurance
22. What does 'subprime lending' refer to in auto finance? → Lending to borrowers with lower credit scores and higher default risk
23. Why is risk profiling important in financial planning? → To match investment strategies with client risk tolerance
24. Which estate planning tool allows an individual to transfer assets directly to beneficiaries while avoiding probate? → Revocable living trust
25. How does inflation affect financial planning? → It reduces the value of money over time
26. Why should professionals set realistic expectations? → To maintain trust and satisfaction
27. Which type of insurance is required by law for vehicle owners in most states? → Auto liability insurance
28. What is the cash surrender value of a policy? → Cash value available upon policy cancellation
29. Under AFIP guidelines, which disclosure is most critical when presenting a Vehicle Service Contract to a customer? → The identity of the obligor and the process for filing claims
30. A customer has a credit score of 580. In auto lending, this score typically falls into which tier? → Subprime