AFIP Vehicle Service Contracts and Aftermarket Products 3

Question 1

Under the FTC's Used Car Rule, what is a dealer required to display on used vehicles offered for sale?

Accepted Answer

A Buyers Guide disclosing warranty coverage or as-is status

Answer

The FTC Used Car Rule requires dealers to display a Buyers Guide on every used vehicle, clearly stating whether the vehicle is sold 'as is,' with a dealer warranty, or with a remaining manufacturer warranty.

Question 2

Which federal law requires dealers to disclose the Annual Percentage Rate (APR) and total finance charge to customers in F&I transactions?

Accepted Answer

The Truth in Lending Act (TILA) / Regulation Z

Answer

The Truth in Lending Act, implemented through Regulation Z, requires dealers and lenders to clearly disclose the APR, total finance charge, and all credit terms before consummating a retail installment contract.

Question 3

In F&I compliance, 'payment packing' is best defined as:

Accepted Answer

Quoting a monthly payment that includes undisclosed aftermarket products to inflate the deal

Answer

Payment packing is an illegal practice where F&I managers inflate the monthly payment quote by embedding undisclosed products, deceiving customers into purchasing items they did not knowingly agree to.

Question 4

The Equal Credit Opportunity Act (ECOA) as it applies to automotive F&I prohibits:

Accepted Answer

Discriminating against credit applicants based on race, sex, national origin, or other protected classes

Answer

ECOA prohibits creditors, including dealers acting as credit intermediaries, from discriminating against applicants in any aspect of a credit transaction based on protected characteristics.

Question 5

Under the Gramm-Leach-Bliley Act (GLBA), automotive dealers must provide customers with a privacy notice that:

Accepted Answer

Explains what nonpublic personal information is collected and how it may be shared

Answer

GLBA requires financial institutions, including dealers engaged in financial activities, to provide customers a privacy notice explaining their data collection practices and customers' opt-out rights regarding information sharing.

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

AFIP Vehicle Service Contracts and Aftermarket Products 3