DMV Sales Contracts and Disclosures 3

Question 1

When a vehicle is sold with a full warranty, which section of the Buyers Guide must the dealer complete?

Accepted Answer

The 'Full Warranty' section listing covered systems

Answer

The Buyers Guide has a specific section for full warranty coverage that must be checked and completed with covered systems and duration.

Question 2

A dealer agrees to a sale contingent on the customer obtaining financing. If the customer is later denied, the dealer must typically:

Accepted Answer

Return the down payment and cancel the contract

Answer

A financing contingency clause allows cancellation without penalty if the buyer cannot secure approved financing, and the dealer must refund the deposit.

Question 3

What is 'yo-yo financing' in the context of vehicle sales?

Accepted Answer

When a dealer calls the buyer back to re-sign at worse terms after the car has been delivered

Answer

Yo-yo financing occurs when a dealer allows a customer to drive off, then calls them back claiming financing fell through and demands worse loan terms.

Question 4

Under Regulation M, what must be disclosed in a vehicle lease agreement?

Accepted Answer

Gross capitalized cost, residual value, money factor, and total of payments

Answer

Regulation M (Consumer Leasing Act) requires disclosure of all key lease terms including capitalized cost, residual value, money factor, and total payment obligations.

Question 5

A salesperson tells a buyer the vehicle has never been in an accident, but a prior collision appears in the vehicle history. The buyer relies on this and purchases. This is an example of:

Accepted Answer

Fraudulent misrepresentation

Answer

Stating a false material fact (no prior accident) that induces a buyer to purchase constitutes fraudulent misrepresentation.

DMV - Representative Exam Practice Test

DMV - Representative Exam Practice Test

DMV Sales Contracts and Disclosures 3