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Sales Contracts and Disclosures 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 Sales Contracts and Disclosures flashcards as text

  1. A buyer signs a purchase agreement but the dealer has not yet signed. At this point, the contract is:

    Answer: Binding only on the buyer

    A signed offer by the buyer creates an obligation on the buyer's side, but the contract is not fully binding until the dealer also signs.

  2. Under the FTC Used Car Rule, dealers must display a Buyers Guide on used vehicles. Where must this guide be placed?

    Answer: On the vehicle's side window

    The FTC Buyers Guide must be displayed on the side window of the used vehicle so it is visible from outside.

  3. A dealer sells a vehicle 'as-is.' Two days later the engine fails. The buyer demands repair under an implied warranty. The dealer's correct response is:

    Answer: Decline, because the as-is disclosure eliminates implied warranties

    A proper as-is disclosure, when required by law to appear on the Buyers Guide, eliminates the dealer's implied warranty obligations.

  4. Which document itemizes all fees, taxes, and the final amount financed in a vehicle sale?

    Answer: Retail installment sales contract

    The retail installment sales contract (RISC) details the purchase price, fees, taxes, trade-in value, and total amount financed.

  5. A customer asks a salesperson whether the vehicle was previously used as a rental. The salesperson does not know but says 'No.' This could constitute:

    Answer: Material misrepresentation

    Making a false statement about a material fact—even without knowing it is false—can constitute misrepresentation under consumer protection laws.

  6. A dealership adds a $500 'dealer prep fee' not mentioned during negotiation. This fee must be:

    Answer: Listed separately on the purchase contract

    All fees must be itemized separately on the purchase contract; undisclosed fees added at signing may violate consumer protection rules.

  7. A vehicle's odometer reads 42,000 miles but the title brand says 'Exceeds Mechanical Limits.' The dealer must:

    Answer: Disclose the brand and its meaning to the buyer in writing

    Federal odometer law requires written disclosure when an odometer reading cannot be relied upon due to a mechanical limits brand.