DMV Advertising and Sales Practices 2

Question 1

A dealer advertises a vehicle at a specific price but refuses to sell it at that price when a customer arrives. This practice is known as:

Accepted Answer

Bait and switch

Answer

Bait and switch involves advertising a product at an attractive price to lure customers, then refusing to sell at that price or pushing them toward a more expensive item.

Question 2

Which federal agency has primary authority over deceptive automotive advertising practices?

Accepted Answer

Federal Trade Commission (FTC)

Answer

The FTC has primary authority to regulate deceptive advertising and unfair business practices, including those in the automotive industry.

Question 3

When advertising a monthly payment on a vehicle, a dealer MUST also disclose:

Accepted Answer

The total number of payments and total amount financed

Answer

Truth in Lending Act (TILA) requires that when a payment amount is advertised, the total number of payments and total financed amount must also be clearly disclosed.

Question 4

A dealership's internet ad for a vehicle fails to include the dealer's license number as required by state law. This advertisement is:

Accepted Answer

A violation regardless of whether the price is accurate

Answer

Omitting a required dealer license number is a regulatory violation independent of whether other ad content is accurate.

Question 5

A dealer promotes a vehicle as having a 'manufacturer's warranty' when only a limited dealer warranty applies. This is an example of:

Accepted Answer

Material misrepresentation

Answer

Falsely claiming a manufacturer's warranty when only a limited dealer warranty exists is material misrepresentation because it affects a consumer's purchase decision.

DMV - Representative Exam Practice Test

DMV - Representative Exam Practice Test

DMV Advertising and Sales Practices 2