DMV - Representative Unlawful Acts and Conduct Questions and Answers — Questions and Answers
Question 1: A vehicle salesperson is terminated from their employment at a dealership. It is discovered they sold a personal vehicle to a customer using the dealership's report of sale documents without informing the dealer. According to the California Vehicle Code, this action is considered:
- Standard industry practice for private sales.
- Permissible if the salesperson reimburses the dealership for the forms.
- An unlawful act and grounds for license suspension or revocation. (Correct answer)
- A minor infraction resulting only in a formal warning.
Correct answer: An unlawful act and grounds for license suspension or revocation.
California Vehicle Code section 11806(j) explicitly makes it unlawful for a salesperson to act as a dealer by purchasing or selling a vehicle using the license, report of sale books, or other supplies of a dealer to facilitate the transaction when not acting on behalf of that dealer. This is a serious violation and can lead to disciplinary action, including license suspension or revocation.
Question 2: A customer complains to the DMV that a dealer refused to sell them a vehicle at the advertised price. Which of the following scenarios represents an unlawful act by the dealer?
- The advertisement clearly stated the price was valid only for a 24-hour sale that ended the previous day.
- The dealer refused to sell at the advertised price because the customer had poor credit and could not secure financing.
- The dealer refused to sell at the advertised price unless the customer also purchased an extended service contract. (Correct answer)
- The advertisement for a specific vehicle included its VIN, and the vehicle was sold just before the customer arrived.
Correct answer: The dealer refused to sell at the advertised price unless the customer also purchased an extended service contract.
It is unlawful to fail to sell a vehicle at the advertised total price while the vehicle remains unsold. Tying the sale to the purchase of an additional, optional product like an extended service contract is a prohibited practice. A dealer must sell the vehicle at the advertised price to any willing buyer, exclusive of specified taxes and fees, without requiring the purchase of other goods or services.
Question 3: Which of the following actions by a licensed vehicle salesperson is explicitly defined as unlawful conduct?
- Working for two different dealerships at the same time, provided they are under common controlling ownership.
- Lending their salesperson's license to a coworker who is waiting for their renewal to be processed. (Correct answer)
- Receiving a commission based on the profit of a vehicle sale.
- Supervising other vehicle salespersons as a sales manager.
Correct answer: Lending their salesperson's license to a coworker who is waiting for their renewal to be processed.
California Vehicle Code section 11819(a) makes it unlawful for a person to lend a salesperson's license to any other person or knowingly permit its use by another. A license is specific to the individual to whom it is issued.
Question 4: A dealership is audited by the DMV. The dealer has stored all original paper records for sales transactions from the last two years at a secure, third-party facility in California. When the DMV requests these records, how much time does the dealer have to produce them?
- 24 hours
- 3 business days (Correct answer)
- 10 business days
- 30 calendar days
Correct answer: 3 business days
According to California Code of Regulations, Title 13, Section 272.02, after an initial 90-day onsite retention period, original paper records may be stored at an offsite location. However, if the DMV requests these records, they must be retrieved and made available for inspection within 3 business days.
Question 5: It is an unlawful act for a manufacturer or distributor to coerce a dealer in any of the following ways EXCEPT:
- Requiring the dealer to participate in an advertising campaign at the dealer's expense.
- Forcing the dealer to accept delivery of vehicles that the dealer has not voluntarily ordered.
- Threatening to cancel a franchise agreement if the dealer does not agree to prejudicial terms.
- Notifying a dealer in good faith of a violation of the terms of their franchise agreement. (Correct answer)
Correct answer: Notifying a dealer in good faith of a violation of the terms of their franchise agreement.
California Vehicle Code section 11713.2 outlines several unlawful coercive acts by manufacturers. However, the code explicitly states that a notice in good faith to any dealer of the dealer's violation of any terms or provisions of their franchise or contractual agreement does not constitute a violation.
Question 6: A consumer purchases a used car from a dealership. Upon termination of their employment, the salesperson who sold the car fails to return a demonstrator vehicle to the dealer that was lawfully entitled to it. This action is:
- A civil matter strictly between the salesperson and the dealer.
- A reason for the DMV to refuse, suspend, or revoke the salesperson's license. (Correct answer)
- Permissible if the salesperson intends to purchase the vehicle.
- Only an issue if the vehicle is damaged while in the salesperson's possession.
Correct answer: A reason for the DMV to refuse, suspend, or revoke the salesperson's license.
California Vehicle Code section 11806(c) states that the DMV may refuse to issue or may suspend or revoke a salesperson's license if they have failed to surrender possession of, or failed to return, a vehicle to a dealer lawfully entitled thereto upon termination of employment.
DMV - Representative Unlawful Acts and Conduct Questions and Answers
A vehicle salesperson is terminated from their employment at a dealership.
It is discovered they sold a personal vehicle to a customer using the dealership's report of sale documents without informing the dealer.
According to the California Vehicle Code, this action is considered: