DMV Advertising and Sales Practices 4

Question 1

A dealer advertises a manufacturer's cash rebate as a 'dealer discount.' This is:

Accepted Answer

Deceptive because it misrepresents the source of the savings

Answer

Misrepresenting a manufacturer's rebate as a dealer discount misleads consumers about who is providing the savings and can distort price negotiations.

Question 2

Under the Truth in Lending Act (TILA/Regulation Z), which 'trigger term' in an ad requires full credit disclosure?

Accepted Answer

'Down payment of $1,500'

Answer

Stating a specific down payment amount is a Regulation Z trigger term that requires disclosure of the APR, number of payments, and total of all payments.

Question 3

A dealership's TV commercial features a vehicle at a specific price, but that vehicle has already been sold. How long does the dealer typically have to update or remove such an advertisement?

Accepted Answer

A reasonable time after the vehicle is sold, often 24–48 hours under state rules

Answer

Most state regulations require dealers to remove or update ads within a short, reasonable period after a vehicle is sold to avoid misleading consumers.

Question 4

A dealer places an ad claiming vehicles are 'priced below invoice.' Which of the following statements is TRUE?

Accepted Answer

The dealer must be able to substantiate this claim with documentation

Answer

Price claims like 'below invoice' must be substantiated with actual cost documentation; if challenged, the dealer must prove the claim is accurate.

Question 5

Which of the following vehicles is EXEMPT from the FTC Used Car Buyers Guide requirement?

Accepted Answer

Vehicles sold between private parties (not dealers)

Answer

The FTC Used Car Rule applies to dealers — private party sales between individuals are exempt from the Buyers Guide requirement.

DMV - Representative Exam Practice Test

DMV - Representative Exam Practice Test

DMV Advertising and Sales Practices 4