Dealer-Specific Regulations Flashcards
7 cards from real DMV practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Dealer-Specific Regulations flashcards as text
A franchised new car dealer receives a vehicle from the manufacturer with a defect listed on a technical service bulletin (TSB). What is the dealer's obligation before selling the vehicle?
Answer: Perform the TSB repair before delivery
Dealers are generally required to perform outstanding TSB repairs and any open recalls before delivering a new vehicle to a customer.
Which federal agency regulates the used car Buyers Guide requirement for dealers?
Answer: Federal Trade Commission (FTC)
The FTC's Used Car Rule mandates the Buyers Guide disclosure on all used vehicles sold by dealers.
When a dealer accepts a vehicle as a trade-in, which document must the selling customer sign?
Answer: Odometer Disclosure Statement
Federal law requires the seller (trade-in customer) to sign an Odometer Disclosure Statement certifying the mileage at the time of transfer.
A dealer's surety bond is primarily designed to protect:
Answer: Consumers and the state from financial harm caused by the dealer
A surety bond provides financial protection to consumers and the state if the dealer engages in fraud, fails to transfer titles, or otherwise violates dealer regulations.
A dealer issues a 30-day temporary operating permit (TOP). After the TOP expires, what must have occurred for the vehicle to be legally driven?
Answer: The buyer must have received permanent registration and plates
A TOP is a temporary authority to operate while permanent registration is processed; once it expires, the vehicle must be permanently registered.
Under the Truth in Lending Act (TILA), what must a dealer's finance department disclose to a buyer financing a vehicle?
Answer: The annual percentage rate (APR), finance charge, and total payment amount
TILA requires disclosure of the APR, total finance charge, amount financed, and total of all payments before the buyer signs a credit contract.
If a dealer advertises a vehicle at a specific price but charges a higher price at the point of sale, this practice is known as:
Answer: Bait and switch advertising
Bait and switch advertising is illegal and occurs when a dealer lures customers with an advertised price they have no intention of honoring.