DMV - Representative Advertising and Sales Practices Questions and Answers — Questions and Answers
Question 1: A California vehicle dealer's newspaper advertisement lists a specific SUV for $25,000. According to the California Vehicle Code, which of the following costs can be legally excluded from this advertised price?
- Dealer-installed options already on the vehicle
- A mandatory "market adjustment" fee
- The dealer document processing charge (Correct answer)
- The cost of a pre-installed vehicle theft deterrent system
Correct answer: The dealer document processing charge
California Vehicle Code § 11713.1(b) requires the advertised price of a vehicle to include all costs to the purchaser at the time of sale, except for specific government fees (like sales tax and registration), finance charges, and a dealer document processing charge. Any mandatory dealer-added items or markups must be included in the advertised price.
Question 2: A dealership advertises a "Certified Pre-Owned" vehicle. However, they fail to provide the buyer with a copy of the required inspection report before the sale. Which of the following is also a prohibited reason for advertising a vehicle as "certified" in California?
- The vehicle was previously a rental car
- The vehicle's title is branded as a "Lemon Law Buyback" (Correct answer)
- The vehicle has minor cosmetic repairs
- The vehicle is being sold with a limited warranty
Correct answer: The vehicle's title is branded as a "Lemon Law Buyback"
According to the Car Buyer's Bill of Rights, a dealer is prohibited from advertising a vehicle as "certified" if the vehicle was reacquired by the manufacturer or dealer under a state or federal warranty law (i.e., "lemon law"). Other prohibitions include having a branded title (salvage, junk, flood), frame damage, or an inaccurate odometer reading.
Question 3: A customer comes into a dealership interested in a sedan they saw advertised for a very low price. The salesperson immediately informs them that the advertised car was "just sold," but then aggressively steers them toward a much more expensive model. This sales tactic is an example of:
- Upselling
- Bait and switch (Correct answer)
- Promotional pricing
- A guaranteed trade-in
Correct answer: Bait and switch
This scenario describes "bait and switch" advertising, which is illegal. It occurs when a dealer advertises a vehicle at a specific price with no intention of selling it, in order to lure customers in and then pressure them into buying a different, typically more expensive, vehicle.
Question 4: Which of the following is a mandatory requirement for any advertisement that lists a specific vehicle for sale?
- The name of the salesperson to contact
- The date the vehicle arrived on the lot
- The vehicle's original MSRP
- The vehicle's license number or VIN (Correct answer)
Correct answer: The vehicle's license number or VIN
California Vehicle Code § 11713.1(a) requires that an advertisement for a specific vehicle must identify that vehicle by its model, model-year, and either its license number or its Vehicle Identification Number (VIN). This ensures that the advertised vehicle is clearly identifiable.
Question 5: A dealership's advertisement includes the phrase "FREE flat-screen TV with every car purchase!" This type of advertising is:
- Permitted if the TV is valued under $100
- Permitted during special holiday sales events
- Prohibited, as it's a gift contingent on purchasing a vehicle (Correct answer)
- Prohibited unless the TV manufacturer co-sponsors the ad
Correct answer: Prohibited, as it's a gift contingent on purchasing a vehicle
California Vehicle Code § 11713.1(h) explicitly prohibits advertising free merchandise, gifts, or services that are contingent on the purchase of a vehicle. The offer must be available to everyone, not just those who complete a purchase.
Question 6: A dealership advertises a vehicle online. After the vehicle is sold, how long does the dealer have to remove the advertisement?
- 24 hours
- 48 hours (Correct answer)
- 72 hours
- 5 business days
Correct answer: 48 hours
California regulations require a dealer to withdraw any advertisement of a specific vehicle within 48 hours after it has been sold or is no longer available for sale.
DMV - Representative Advertising and Sales Practices Questions and Answers
A California vehicle dealer's newspaper advertisement lists a specific SUV for $25,000.
According to the California Vehicle Code, which of the following costs can be legally excluded from this advertised price?