DMV Dealer-Specific Regulations 4 — Questions and Answers
Question 1: A dealer who sells a vehicle with a rolled-back odometer can be prosecuted under which federal law?
- The Motor Vehicle Safety Act
- The Federal Odometer Act (Truth in Mileage Act) (Correct answer)
- The Consumer Protection Disclosure Act
- The National Traffic and Motor Vehicle Safety Act
Correct answer: The Federal Odometer Act (Truth in Mileage Act)
The Federal Odometer Act (also called the Truth in Mileage Act) makes it a federal crime to tamper with or misrepresent a vehicle's odometer reading.
Question 2: A dealer must report a vehicle sale to the DMV for title transfer typically within how many days in most states?
- 5 days
- 10 to 30 days, depending on state law (Correct answer)
- 60 days
- 90 days
Correct answer: 10 to 30 days, depending on state law
Most states require dealers to submit title paperwork and fees to the DMV within 10 to 30 days of the sale date.
Question 3: Which type of dealer license allows the holder to buy and sell vehicles only between licensed dealers, not to the general public?
- Retail dealer license
- Wholesale dealer license (Correct answer)
- Broker license
- Auction dealer license
Correct answer: Wholesale dealer license
A wholesale dealer license restricts sales to other licensed dealers only; selling retail to consumers requires a separate retail dealer license.
Question 4: A dealer who accepts a deposit on a vehicle and then sells it to another buyer without refunding the deposit may be liable for:
- A minor administrative infraction only
- Breach of contract and consumer fraud violations (Correct answer)
- A mandatory license downgrade
- Loss of manufacturer franchise rights only
Correct answer: Breach of contract and consumer fraud violations
Retaining a deposit while selling a vehicle to someone else constitutes breach of contract and may violate state consumer fraud statutes.
Question 5: Under the FTC's Used Car Rule, the Buyers Guide must be retained by the dealer after the sale for a minimum of:
- 6 months
- 1 year (Correct answer)
- 2 years
- 5 years
Correct answer: 1 year
The FTC requires dealers to retain their copy of the Buyers Guide for at least one year after the date of sale.
Question 6: A dealer's demonstration (demo) vehicle that has been driven by employees must be disclosed to buyers as:
- A certified pre-owned vehicle
- A used vehicle with prior mileage (Correct answer)
- A factory second
- A fleet vehicle
Correct answer: A used vehicle with prior mileage
Demo vehicles are classified as used vehicles regardless of model year, and their prior mileage must be disclosed on the Buyers Guide and odometer statement.
Question 7: Which entity typically investigates consumer complaints against a licensed motor vehicle dealer at the state level?
- The Federal Bureau of Investigation (FBI)
- The state's DMV or Motor Vehicle Dealer Licensing Board (Correct answer)
- The Better Business Bureau (BBB)
- The state Attorney General exclusively
Correct answer: The state's DMV or Motor Vehicle Dealer Licensing Board
State DMV offices or dedicated dealer licensing boards are the primary agencies that investigate and discipline licensed motor vehicle dealers.
DMV Dealer-Specific Regulations 4
A dealer who sells a vehicle with a rolled-back odometer can be prosecuted under which federal law?