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
When a vehicle is sold with a full warranty, which section of the Buyers Guide must the dealer complete?
Answer: The 'Full Warranty' section listing covered systems
The Buyers Guide has a specific section for full warranty coverage that must be checked and completed with covered systems and duration.
A dealer agrees to a sale contingent on the customer obtaining financing. If the customer is later denied, the dealer must typically:
Answer: Return the down payment and cancel the contract
A financing contingency clause allows cancellation without penalty if the buyer cannot secure approved financing, and the dealer must refund the deposit.
What is 'yo-yo financing' in the context of vehicle sales?
Answer: When a dealer calls the buyer back to re-sign at worse terms after the car has been delivered
Yo-yo financing occurs when a dealer allows a customer to drive off, then calls them back claiming financing fell through and demands worse loan terms.
Under Regulation M, what must be disclosed in a vehicle lease agreement?
Answer: Gross capitalized cost, residual value, money factor, and total of payments
Regulation M (Consumer Leasing Act) requires disclosure of all key lease terms including capitalized cost, residual value, money factor, and total payment obligations.
A salesperson tells a buyer the vehicle has never been in an accident, but a prior collision appears in the vehicle history. The buyer relies on this and purchases. This is an example of:
Answer: Fraudulent misrepresentation
Stating a false material fact (no prior accident) that induces a buyer to purchase constitutes fraudulent misrepresentation.
A customer wants to add an aftermarket alarm system to the contract. The dealer charges for it but fails to install it. This most likely violates:
Answer: FTC Act Section 5 (unfair or deceptive acts)
Charging for a product or service not delivered is a deceptive trade practice under FTC Act Section 5.
Which federal law requires dealers to provide a written odometer disclosure statement at the time of sale for most vehicles?
Answer: Federal Odometer Act (Motor Vehicle Information and Cost Savings Act)
The Federal Odometer Act requires dealers to provide a written odometer disclosure statement signed by both seller and buyer at vehicle transfer.