DMV Sales Contracts and Disclosures 2

Question 1

A buyer signs a purchase agreement but the dealer has not yet signed. At this point, the contract is:

Accepted Answer

Binding only on the buyer

Answer

A signed offer by the buyer creates an obligation on the buyer's side, but the contract is not fully binding until the dealer also signs.

Question 2

Under the FTC Used Car Rule, dealers must display a Buyers Guide on used vehicles. Where must this guide be placed?

Accepted Answer

On the vehicle's side window

Answer

The FTC Buyers Guide must be displayed on the side window of the used vehicle so it is visible from outside.

Question 3

A dealer sells a vehicle 'as-is.' Two days later the engine fails. The buyer demands repair under an implied warranty. The dealer's correct response is:

Accepted Answer

Decline, because the as-is disclosure eliminates implied warranties

Answer

A proper as-is disclosure, when required by law to appear on the Buyers Guide, eliminates the dealer's implied warranty obligations.

Question 4

Which document itemizes all fees, taxes, and the final amount financed in a vehicle sale?

Accepted Answer

Retail installment sales contract

Answer

The retail installment sales contract (RISC) details the purchase price, fees, taxes, trade-in value, and total amount financed.

Question 5

A customer asks a salesperson whether the vehicle was previously used as a rental. The salesperson does not know but says 'No.' This could constitute:

Accepted Answer

Material misrepresentation

Answer

Making a false statement about a material fact—even without knowing it is false—can constitute misrepresentation under consumer protection laws.

DMV - Representative Exam Practice Test

DMV - Representative Exam Practice Test

DMV Sales Contracts and Disclosures 2