DMV DMV - Representative Consumer Protection and Dispute Resolution 2

Question 1

If a buyer signed a contract under economic duress or fraudulent misrepresentation, which legal remedy allows them to cancel the contract and be restored to their original position?

Accepted Answer

Rescission

Answer

Reformation

Answer

Novation

Answer

Accord and satisfaction

Question 2

Under the FTC's Holder Rule, if a buyer finances a vehicle purchase through dealer-arranged financing, their claims against the dealer:

Accepted Answer

Can also be asserted against the assignee finance company

Answer

Are waived upon signing the contract

Answer

Must be resolved in arbitration only

Answer

Are limited to warranty claims

Question 3

A California dealer who charges a buyer more than the advertised price for a vehicle is in violation of:

Accepted Answer

California Vehicle Code Section 11713.1(a)

Answer

The Magnuson-Moss Warranty Act

Answer

The Federal Truth in Lending Act

Answer

The Robinson-Patman Act

Question 4

A 'cooling-off period' that allows a buyer to cancel a vehicle sale typically applies to which type of transaction in California?

Accepted Answer

Vehicle sales conducted away from the dealer's lot (e.g., off-premises sales)

Answer

All new vehicle purchases

Answer

All used vehicle purchases

Answer

Vehicle leases only

Question 5

The Truth in Lending Act (TILA) requires dealers arranging financing to disclose the Annual Percentage Rate (APR) and finance charge primarily to:

Accepted Answer

The buyer before the contract is signed

Answer

The lender before loan approval

Answer

The DMV at time of registration

Answer

The California DBO within 30 days

Question 6

Under California law, what is the maximum document preparation (doc) fee a dealer may charge a buyer?

Accepted Answer

$85

Answer

$50

Answer

$80

Answer

No maximum — it must only be disclosed